Your capital is at risk
When you lend through a peer-to-peer platform, borrowers may fail to repay. If that happens you can lose some or all of the money you lent. Returns are never guaranteed.
You are unlikely to be protected if things go wrong
Peer-to-peer lending is not covered by the Financial Services Compensation Scheme (FSCS). This is a fundamental difference from cash held in a bank or building society. If the platform or a borrower fails, there is no government-backed scheme to pay you back.
You may not be able to get your money out quickly
Your money is tied up in loans. Some platforms offer a secondary market or early-access option, but these depend on other investors wanting to buy your loans. In difficult conditions, access can be suspended and you may have to wait until loans are repaid.
Target rates are not guarantees
Advertised rates are targets set by the provider, not promises, and not forecasts. Actual returns will usually be lower after any defaults, and could be negative.
What happens if a platform fails?
FCA-regulated platforms must have a "wind-down plan" to manage the loan book if they stop trading, but recovering your money can be slow, incomplete and uncertain. Always read a provider's wind-down arrangements before investing.
Before you invest
- Only invest money you can afford to lose entirely.
- Make sure you already have an emergency cash fund elsewhere.
- Diversify: never put everything with one platform or one loan.
- Read each provider's Key Investor Information in full.
- Consider taking regulated, professional financial advice.
peertopeerisa.co.uk provides general information and comparison only. It does not provide regulated financial advice and is not authorised by the Financial Conduct Authority.