April this year saw a radical change to the way over 55s can access their pension. The new rules mean that now, anyone aged 55 and over can withdraw their entire pension pot in one lump sum, and it seems this increased flexibility has altered people’s attitudes towards investment opportunities.
A recent survey by Yorkshire Building Society has found that 40% of investors are now more likely to look into riskier methods (such as Peer-to-Peer Lending), with 10% revealing they would “definitely” take greater risk.
Peer-to-Peer (P2P) Lending has grown significantly over the past few years, however the survey found that 42% of consumers are still unaware of such platforms and 60% did not know that this alternative investment method is not covered by the Financial Services Compensation Scheme (FSCS).
Executive Director at Yorkshire Building Society, Andy Caton said:
“The Government is helping to encourage saving and investment with new rules and looks as if it will be successful with people keen to take advantage of increased flexibility and new tax-free allowances. Providers need to match that ambition by helping to encourage responsible saving and investing as there is a genuine threat that enthusiasm for saving and investing will be damaged if people are exposed to unnecessary risks that they do not understand.”
Further Developments
People seeking higher rates of return may now also be encouraged to look into what P2P lenders are offering as from April 2016 investors can take advantage of tax free returns announced by the Chancellor in his 2015 Summer Budget.
At Wellesley & Co, we welcome the new developments and are pleased that they introduce a whole new audience to Peer-to-Peer Lending. We have an innovative business model which offers rates of return of up to 6.32% over five years. We ensure that anyone considering this method of investment is aware that there is risk to capital involved.
People looking into their investment options in light of the new pension freedoms and Innovative Finance ISA update may want to consider Peer-to-Peer Lending as part of a diverse investment portfolio. If you would like further information on Wellesley’s investment products, please contact our London based Customer Service Team on 0800 888 6001, alternatively please email [email protected]. Please note that Wellesley are not advisors, and cannot give advice to which product would best suit your investment needs. If you would like advice, please contact a financial advisor.