The Bank of England’s Monetary Policy Committee has voted to maintain the Base Rate at the current low of 0.5% for yet another month. The previous shift in the Base Rate was the reduction of 0.5 percentage points to 0.5% on the 5th March 2009. This low rate has contributed to a dire investment landscape for investors seeking decent returns on their funds.
As inflation is currently also at a very low rate of 0% and is expected by the Bank of England’s Governor Mark Carney to remain low in the immediate short term. This said, in recent Monetary Policy Committee Minutes released, it has been stated that two voting members found the decision whether to hold or increase the rates ‘finely balanced’.
What this means for your money?
As mentioned the current mainstream investment environment is rather bleak. With high street lenders offering rates of return which will not see funds grow at the desired speed, it may be time to look at alternative options.
Alternative finance is going exponentially and niches such as the Peer-to-Peer Lending Sector is experiencing tremendous growth. In April 2015 the level of Peer-to-Peer (P2P) lending completed in the first quarter of the year had grown 32.7% on the last three months of 2014. This illustrating that the sector is growing year on year.
Although Peer-to-Peer platforms offer an ever so appealing alternative to what is being offered by high street lenders, they operate differently and it is important to understand the risks involved. When investing through Peer-to-Peer lending platforms your capital will be lent to individuals and companies that may be unable to meet repayment schedule demands. This therefore leaves your capital and interest payments at risk.
An Alternative
Wellesley & Co is a Peer-to-Peer lending platform with an innovative business model which offers investors fixed rates of return of up to 6.32% over five years. We promise we will only lend your money to a borrower that we have already lent to and we have a discretionary Provision Fund that investors can apply to if a borrower fails to repay capital or interest due. It is important to note that Peer-to-Peer lending is not covered by the Financial Services Compensation Scheme (FSCS).
Our model sees each loan initially funded by the Wellesley Group. Once the loans have been initially funded, we invite our investors to participate in the loans that we have already made. A portion of each loan will always be funded by Wellesley shareholder money.
As stated, Peer-to-Peer lending includes risk, each investment made through Wellesley & Co involves lending to individuals or companies and therefore your capital is at risk and interest payments are not guaranteed if the borrower defaults.