ashtondav
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Post by ashtondav on Apr 15, 2016 9:34:10 GMT
Which other p2p provider are you transferring to, Ton?
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alender
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Post by alender on Apr 15, 2016 10:36:15 GMT
I have been with RS from the beginning but this latest move will increase my rate of withdrawal. I was already running down my commitment due to the lack of opportunities to invest for 1 and 3years at decent rates. Indeed there is an increasing number of early 3 year repayments. I can only see the new "rolling" category further diminishing the 3 year returns so will continue to withdraw my funds. I am also getting increased repayments on my 3 year loans which are at incidentally the ones at the highest interest rate. As these loans have not been going that long there are either borrowers whose financial position changes (within a year of taking out the loan) or they are refinancing the loan, given current RS rates I will let you decide.
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happy
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Post by happy on Apr 15, 2016 10:55:07 GMT
Impressive. Where is this marvellous account alender? The best I've managed is 3% with Santander so I would be very happy indeed to find an additional provider at decent rates! That said, unless you aren't in a position to take any risk, then diversified investments in equities, property etc are likely to be a better option over the longer term. Maybe even a few quid in the likes of Ratesetter if you can stand the hassle.
If anyone has put seriously money into Ratesetter before maxing out the better options then they're probably missing a trick.So oik , you are telling me that setting "your rate" with Ratesetter and logging in every now and again to see where the market is relative to your money and making the odd adjustment is more hassle than setting up and managing multiple bank transfers and direct debits to make sure you meet all the qualifying conditions etc then I think you are trying to kid us all. Don't get me wrong, I have well over £50k in 3-5% current accounts and the like so I know what is involved there in addition to other near-cash investments such that I would not need to call on my P2P money in the next 12 months in anything other than a total crisis. But I also have a pretty decent 5 figure sum in Zopa and even more in Ratesetter and I can assure you this has earnt me a better return for my effort than any other P2P, S&S ISA, SIPP etc I own, bar none! Yes I get a better return on other P2P sites but they take time and effort, Ratesetter (and Zopa) can never be described as difficult. All these current accounts are fine until the banks change the T&Cs, just right now it suites them to give us 3% or so but I doubt this will be the case forever and that will be hastle finding new homes for our money.
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Post by misotu on Apr 15, 2016 11:02:38 GMT
Actually, re-reading the rolling market information, I have another question and I hope westonkev will have something to say on the matter. If I'm right in thinking that there may be a bit of a cashflow problem in the newly-named "Rolling" market when P2P ISAs arrive then I would like to be very clear about what will happen. I would have thought that the funds would remain on loan pending funds being available and that a repayment "queue" (effectively) would be formed which would gradually be dealt with as new money arrives. But the information seems to suggest that if there aren't sufficient funds then that's it ... you have to lend that money until the loan is repaid which might be 5 years! So just the one shot - and if the timing isn't right you're stuffed? Surely that can't be right. I can understand that there might be a delay. But I don't understand why someone lending in Rolling *after* me might get their funds out on time while I languish for up to five years. If that's the case then I'm first out the door and off to the BS until P2P ISAs appear. Clarification please? It does read like that, it's true. And I suppose that is to manage lenders expectations that in the worse scenario they would be locked in. But my understanding is that monies would be released across all rolling loans once sufficient liquidity has returned. If this happens in one block or piecemeal based on shortest term is clearly left to discretion within the terms above, but in reality hopefully common sense will prevail and rolling funds released. If RateSetter did tie in loans permanently, then the reputational impact would inevitably lead to the platform collapse through lack of new lender funds. So I'm sure they would prefer to revert to a new normal as soon as possible. Kevin. Thanks for this Kevin and what you say makes sense. It's good that people are aware of the worst that can happen of course, and I was aware of this from the start. But if what you believe to be the case in the event of temporary liquidity issues is accurate then the picture is being painted far more bleakly than is justified, which doesn't help RS. The wording could be changed to be much clearer and more reassuring, while making plain the ultimate downside. In fact, I think a lot of information on the site needs an overhaul (see james' post above about conflicting definitions of how the Rolling market works). The information on the lending screen for Rolling is incredibly vague and really needs tightening up and more detail specific to the product. "Rolling" is either a monthly term with conditions or some other kind of term which needs to be clearly defined and this isn't the case at the moment. This was my original point and you haven't addressed this so far. I know you have found some of the comments on here quite frustrating but you surely understand that logging in to find the product renamed and references to the 1 month term removed is a bit of a shock! Add to this conflicting information about how it works and obviously people are going to have concerns.
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alender
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Post by alender on Apr 15, 2016 11:40:25 GMT
So oik , you are telling me that setting "your rate" with Ratesetter and logging in every now and again to see where the market is relative to your money and making the odd adjustment is more hassle than setting up and managing multiple bank transfers and direct debits to make sure you meet all the qualifying conditions etc then I think you are trying to kid us all. Don't get me wrong, I have well over £50k in 3-5% current accounts and the like so I know what is involved there in addition to other near-cash investments such that I would not need to call on my P2P money in the next 12 months in anything other than a total crisis. But I also have a pretty decent 5 figure sum in Zopa and even more in Ratesetter and I can assure you this has earnt me a better return for my effort than any other P2P, S&S ISA, SIPP etc I own, bar none! Yes I get a better return on other P2P sites but they take time and effort, Ratesetter (and Zopa) can never be described as difficult. All these current accounts are fine until the banks change the T&Cs, just right now it suites them to give us 3% or so but I doubt this will be the case forever and that will be hastle finding new homes for our money. Once you have opened the accounts and setup the monthly standing orders there is no work to do so no hassle or time wasting. Compare this to RS which I find time consuming as I am not happy for my funds to be leant out at MR or lend now rate and as I do not want to have funds sitting doing nothing, I only place funds on the Market when the interest rate is at an acceptable level, given the volatile nature of the rates this takes up a certain amount of time. Also I have to move every capital/interest payment and early repayments manually to my linked bank account and then check that bank account from 4pm onwards. I do this so I can move the money to another account where I can get interest as I try to not lose more than the 1 to 4 days loss of interest with every RS withdrawal. Every event is recorded in a spreadsheet so I can calculate my tax position and if necessary change tack. There is also the research required to try to find out how RS actually works as it a lot more complicated than it first seems, keeping up with changes like the current Rolling change to find the impact and special offers which trash rates so I know when to stay away. This all takes time compared to my bank accounts which are not only predictable but as I have said take up no time once setup.
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Post by propman on Apr 15, 2016 12:04:41 GMT
I wonder whether the assumption is that the majority will not change the default settings? The new wording then stops anyone complaining when they try and withdraw funds just after they have rolled through the MR destination of funds repaid?
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happy
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Post by happy on Apr 15, 2016 12:27:27 GMT
So oik , you are telling me that setting "your rate" with Ratesetter and logging in every now and again to see where the market is relative to your money and making the odd adjustment is more hassle than setting up and managing multiple bank transfers and direct debits to make sure you meet all the qualifying conditions etc then I think you are trying to kid us all. Don't get me wrong, I have well over £50k in 3-5% current accounts and the like so I know what is involved there in addition to other near-cash investments such that I would not need to call on my P2P money in the next 12 months in anything other than a total crisis. But I also have a pretty decent 5 figure sum in Zopa and even more in Ratesetter and I can assure you this has earnt me a better return for my effort than any other P2P, S&S ISA, SIPP etc I own, bar none! Yes I get a better return on other P2P sites but they take time and effort, Ratesetter (and Zopa) can never be described as difficult. All these current accounts are fine until the banks change the T&Cs, just right now it suites them to give us 3% or so but I doubt this will be the case forever and that will be hastle finding new homes for our money. Once you have opened the accounts and setup the monthly standing orders there is no work to do so no hassle or time wasting. Compare this to RS which I find time consuming as I am not happy for my funds to be leant out at MR or lend now rate and as I do not want to have funds sitting doing nothing, I only place funds on the Market when the interest rate is at an acceptable level, given the volatile nature of the rates this takes up a certain amount of time. Also I have to move every capital/interest payment and early repayments manually to my linked bank account and then check that bank account from 4pm onwards. I do this so I can move the money to another account where I can get interest as I try to not lose more than the 1 to 4 days loss of interest with every RS withdrawal. Every event is recorded in a spreadsheet so I can calculate my tax position and if necessary change tack. There is also the research required to try to find out how RS actually works as it a lot more complicated than it first seems, keeping up with changes like the current Rolling change to find the impact and special offers which trash rates so I know when to stay away. This all takes time compared to my bank accounts which are not only predictable but as I have said take up no time once setup. Fair coments.... and it just shows that it is horses for courses. I personally have never felt the need to track every transaction with RS (or Zopa) so don't have that overhead and I am happy with the small amount of work to manage things and with my understanding of how they work. Bottom line for me is I simply do not have enough direct debits to qualify to open enough current accounts to be able to invest the extra cash I have in RS and Z so it makes sense for me to do both.
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alender
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Post by alender on Apr 15, 2016 13:38:39 GMT
Bottom line for me is I simply do not have enough direct debits to qualify to open enough current accounts to be able to invest the extra cash I have in RS and Z so it makes sense for me to do both. The only account I have that requires direct debits to get the full interest rate is the Santander account which gives cash back on these, most require funding but monthly standing orders I set up between my accounts take care of this.
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Post by westonkevRS on Apr 15, 2016 17:13:30 GMT
I wonder whether the assumption is that the majority will not change the default settings? The new wording then stops anyone complaining when they try and withdraw funds just after they have rolled through the MR destination of funds repaid? As a lazy customer that always reinvested at the going rate, I've been quite surprised by the percentage of money lent at a chosen rate rather than auto. I can recall the exact %, but it's over half and always has been. Although it varies by term because it makes less sense to wait on the monthly. It's not often there is over £6m every day in the monthly. I wonder how much is waiting to pounce post ISA, or waiting for a reversion to mid 3%.... Kevin.
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jonah
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Post by jonah on Apr 15, 2016 17:52:31 GMT
Bottom line for me is I simply do not have enough direct debits to qualify to open enough current accounts to be able to invest the extra cash I have in RS and Z so it makes sense for me to do both. The only account I have that requires direct debits to get the full interest rate is the Santander account which gives cash back on these, most require funding but monthly standing orders I set up between my accounts take care of this. Whilst I agree that the the risk / reward ratio is up to everyone to decide for themselves, there are ways to generate extra direct debits if needed. For example the RS regular lender creates a direct debit There are other ways if people are interested but I am trying to be on topic today.
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alender
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Post by alender on Apr 15, 2016 17:58:03 GMT
It's not often there is over £6m every day in the monthly. I wonder how much is waiting to pounce post ISA, or waiting for a reversion to mid 3%.... Kevin. If you are a sophisticated investor with a range of investments I do not believe P2P ISA make much sense after the latest set of tax changes. This is because the first £500 or £1000 is untaxed from P2P, the rest is taxed at standard rate, dividends after the first £5000 are taxed at a higher rate than interest as you have already paid the corporation tax. I am therefore moving all my cash ISA monies as each fix term ends to ISA equity investments as well as all new ISA monies. Equities not in an ISA will be reduced accordingly. This also makes sense as it is easier and more prudent if short term cash is ever required. Also if you are a company owner and pay yourself dividends you will easily use up the £5000 dividend allowance and there are lot of these about now days. When I was talking to a representative of one of these self investment ISA platforms I mentioned this and I was surprised to find out that a lot of investors are doing this as I have not seen this anywhere in the press or elsewhere.
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james
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Post by james on Apr 15, 2016 18:54:58 GMT
If you are a sophisticated investor with a range of investments I do not believe P2P ISA make much sense after the latest set of tax changes. This is because the first £500 or £1000 is untaxed from P2P, the rest is taxed at standard rate, dividends after the first £5000 are taxed at a higher rate than interest as you have already paid the corporation tax. I may well receive more than £20k of P2P interest this tax year. That makes ISA capability quite useful. As I understand it after the £5k dividend allowance is paid these are the tax rates for dividends outside an ISA: 7.5% dividends for basic rate taxpayers vs 20% for interest 32.5% dividends for higher rate taxpayers vs 40% for interest 38.1% dividends for additional rate taxpayers vs 45% for interest Given that the tax rate for dividends outside an ISA is always lower than for interest outside an ISA once the two tax free allowances are used where's the gain from preferring to have dividends than interest paid in an ISA unless the amount of interest being paid is quite low?* This doesn't mean that equities inside a S&S aren't useful. I'm making sales inside an ISA where my accumulated gains are well over the CGT threshold and didn't have to bed and breakfast to avoid accumulating that much, nor pay any attention to other sales timing issues that I would have had to deal with if the money was outside an ISA. And no CGT paperwork either. *quite low can be many thousands for a person with low pension or other PAYE income and use of both lower savings income tax rate and personal savings allowance.
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alender
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Post by alender on Apr 15, 2016 19:50:03 GMT
7.5% dividends for basic rate taxpayers vs 20% for interest 32.5% dividends for higher rate taxpayers vs 40% for interest 38.1% dividends for additional rate taxpayers vs 45% for interest This ignores the corporation tax you have already paid, around the 20% to 26% (which is probably irrelevant for the calculations unless it is own company and you have the choice of dividend or salary) which is the reason why no additional tax was payable if you are in the lower rate band before the current changes, however I take you point on the tax bands and the other good points you make. From experience most of the money I have made on equities is in capital gains not dividends and although CGT has decreased and there is the £11,100 threshold (which I can easily use each year), CGs are used to push you into the higher tax bracket. For me the £5000 tax free dividend allowance is more than used up by dividends from small companies that I own. As I do not need the cash and are almost retired the little salary I have is put into a pension, but as I have not yet taken my pension I am left with a large part of the personal allowance which cannot be use from dividends and I have sold all of my bonds. I appreciate I may have an unusual case and I probably used the wrong term when I said “sophisticated investor”, but I would image that the average RS investor will have multiple asset classes and more complex tax affaires than usual and it is not a clear cut decision to go for a P2P ISA.
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james
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Post by james on Apr 15, 2016 20:07:57 GMT
Yes, it ignores the corporation tax, but does holding inside an ISA avoid the corporation paying any of its corporation tax?
What you're doing seems to make sense for your situation. Not common for people to have more dividends than PAYE income, though, not even in retirement when pensions are PAYE. But for those who do it can be a good option to do what you're doing.
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stevio
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Post by stevio on Apr 15, 2016 22:52:05 GMT
Yes, it ignores the corporation tax, but does holding inside an ISA avoid the corporation paying any of its corporation tax? What you're doing seems to make sense for your situation. Not common for people to have more dividends than PAYE income, though, not even in retirement when pensions are PAYE. But for those who do it can be a good option to do what you're doing. This is common for Ltd's, until recently! I think alender was using the ISA for CGT savings?
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