{"id":1173,"date":"2019-03-11T10:53:12","date_gmt":"2019-03-11T10:53:12","guid":{"rendered":"https:\/\/crowdforangels.com\/blog\/?p=1173"},"modified":"2021-07-02T15:08:26","modified_gmt":"2021-07-02T14:08:26","slug":"how-long-would-it-take-to-become-an-innovative-finance-isa-millionaire","status":"publish","type":"post","link":"https:\/\/crowdforangels.com\/blog\/how-long-would-it-take-to-become-an-innovative-finance-isa-millionaire\/","title":{"rendered":"How long would it take to become an Innovative Finance ISA Millionaire?"},"content":{"rendered":"\n

\u201c…in\nthis world nothing can be said to be certain, except death and taxes.\u201d,<\/em> so wrote Benjamin Franklin. The late great comedian Ken Dodd did\nhis best to avoid both, unfortunately succumbing to death last year aged 90.\nFortunately, while both are inevitable, there are many ways that UK investors\ncan legally reduce their tax bill, not least via the ever popular Individual\nSavings Account (ISA).<\/p>\n\n\n\n

Since they were launched in 1999 ISAs have been the go-to product for consumers looking to shelter their savings income from the taxman. According to statistics from HMRC<\/a>, at the end of the 2017\/18 tax year the total market value of Adult ISA holdings stood at a mammoth \u00a3608 billion \u2013 that\u2019s more than the annual GDP of Saudi Arabia! However, well under 1% of this value was made up by holdings in the relatively new Innovative Finance ISA (IF-ISA).<\/p>\n\n\n\n

Launched by the government in April 2016\nthe IF-ISA enables investors to earn tax-free returns on loans and bonds issued\nby peer-to-peer (P2P) lenders and crowdfunding companies by putting them within\nthe ISA wrapper. These typically take the form of business or consumer loans,\nwhereby investors directly lend to companies looking for growth capital or to\nindividuals looking to borrow money. <\/p>\n\n\n\n

The IF-ISA occupies a middle ground between Cash and Stocks & Shares ISAs in terms of both risk and returns. Various IFISA providers have target rates of return starting at around 4% up to as high as 12%. Of course it involves more risk than the theoretically risk free Cash ISA but is less risky than investing in more volatile equities.<\/p>\n\n\n\n

After a slow start, investors now seem to be taking to the IFISA<\/strong><\/p>\n\n\n\n

According to statistics from HMRC, the\nIF-ISA attracted \u00a3290 million in subscriptions in the 2017\/18 tax year across\n31,000 accounts. That soared from just \u00a336 million across 5,000 accounts in the\nprevious year. Some commentators are expecting the figure to hit \u00a31 billion for\n2018\/19 as knowledge of the product increases and investors become more\nattracted to the IF-ISAs \u201chalfway house\u201d status.<\/p>\n\n\n\n

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