Pensions freedoms to boost P2P lending
A survey conducted by Yorkshire Building Society found that two in five (40%) savers were more likely to look at riskier investments like P2P lending, while one in 10 (10%) said they would “definitely” take more risks.
However more than two in five (42%) consumers were unfamiliar with P2P lending as a term, and three in five (60%) said were unaware that they wouldn’t have the protection of the Financial Services Compensation Scheme.
Andy Caton, executive director at Yorkshire Building Society, 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 they do not understand.
“Advice will be crucial in helping achieve success for the launch of new savings rules and we would urge anyone considering riskier investments such as P2P or equity-based investment to take independent financial advice before doing so.”
Bullish savers are targeting 5.30% returns on average, while one in eight believe that more than 8% is possible.
Caton added: “Clearly there is evidence from the research that some have unrealistic expectations on the levels of returns they can achieve over the long-term with some people believing 8% a year or more is realistic.”