P2P investors are ditching cash ISAs  

Assetz Capital’s investor base are becoming less keen on cash ISAs’ returns.

Investors are moving out of cash ISAs, according to a survey from P2P lender Assetz Capital.

More than half (52 per cent) of investors responding to the firm’s Q2 Investor Barometer said they had put money into cash ISAs in the first three months of 2018, but just 37 per cent were still doing so in the second quarter of the year and following the end of the last tax year. This suggests higher inflation, currently at 2.4 per cent in April 2018, and the low rates currently offered by banks may be pushing investors out of cash.

The Q2 Investor Barometer from Assetz Capital surveyed 1000 investors using the fIrm’s P2P lending platform.  Further, it found that 61 per cent are making use of a Stocks and Shares ISA, 60 per cent had an Innovative Finance ISA, while a small minority were invested in Lifetime or Help to Buy ISAs (4 per cent and 3 per cent respectively). 

AltFi's own research across a representative sample of 2000 UK adults found a woefully low knowledge and adoption of the Innovative Finance ISA suggesting Assetz's investors are more familiar (as you'd expect) with both P2P lending and the Innovative Finance ISA.

Stuart Law, CEO of Assetz Capital says the platform’s IFISA offering has grown steadily in popularity since its launch in December 2017 and that it still notable to see this significant drop in cash ISA users.

“As of the end of May, almost £50m has been invested in our ISAs – over £12.5m of which has come from transfers. Around 75 per cent of all investment in our ISA is new money on the platform and the average size of an ISA account is approaching £15,000, which is a lot higher than the industry average of £4,400,” Law said. 

“We believe much of this is driven by a movement away from cash ISAs and we expect this to continue as consumers look to make their money work harder for them,” he added.