According to a recent YouGov survey almost 50% of all UK home owners, yet to invest in Peer-to-Peer finance, are essentially put off by the associated risks. Close to 42% of all participants in the survey shared a fear that Peer-to-Peer lending is too risky.
It is perhaps an unsurprising result however, as almost a quarter of those surveyed had never heard of Peer-to-Peer investment and 17% did not understand how the process works. Amongst those questioned, 5% of them had invested into at least one Peer-to-Peer lending platform.
Youth Leading the Way
It is important to note that Peer-to-Peer lending does of course, involve risk. Without clear understanding of these risks the prospect of Peer-to-Peer lending may be off putting investors as they are unsure about what will happen to their funds. The research illustrates that around 46% of 55+ year olds have cited risk as a reason for not investing in a Peer-to-Peer platforms.
The younger generation however, they seem to be a lot more open to the idea and take the risk in acquiescence. Is because they know more about this risk? Perhaps the younger generation are more put off by major financial institutions that are refusing loans and investment opportunities more and more often these days.
Wellesley & Co. Help Manage the Risk
At least 30% of home owners who have invested in Peer-to-Peer lending have done so in small amounts; totalling £1,000 or below. Nevertheless, at the other end of the scale, at least 18% have invested £5,000 or more. This indicated the demand for alternative finance options in this current bleak investment landscape.
Wellesley & Co display the risks and make sure all lenders are aware that their capital is at risk and interest payments are not guaranteed if a borrower fails to repay a loan, before committing to a term. At the same time we are just as open about the protection our platform has to offer and the benefits you can achieve. Peer-to-Peer lenders are not covered by the Financial Services Compensation Scheme (FSCS), Wellesley & Co are regulated by the Financial Conduct Authority (FCA).
Simple and Easy to Understand
Wellesley & Co aim to make Peer-to-Peer lending straightforward – take a look at the Wellesley ‘How it Works’ video for further information about the lending process through the Wellesley platform. Without knowledge of the risks you cannot attempt to make an informed decision on your investment. It is Wellesley’s duty to ensure that only suitable investors that are aware of all of the risks involved are permitted to place funds on the Wellesley Peer-to-Peer lending online platform.
For more insight into people’s attitude towards Peer-to-Peer lending, take a look at our Pent-up Demand For Peer-to-Peer Lending infographic.