benaj
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Post by benaj on Jan 29, 2019 16:32:24 GMT
Nobody likes cash drag, but apart from Assetz, FC, RS and Zopa, which other UK P2P platforms can handle £10 Mil new investment per month? Or there's no such a thing
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benaj
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Post by benaj on Jan 29, 2019 17:35:43 GMT
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ceejay
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Post by ceejay on Jan 29, 2019 19:54:52 GMT
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Personally all my ISA allowance has and always gone into an S&S ISA. Its by far the most sensible option.
... you would be somewhat foolish to do P2P via an ISA because you would be unable to make use of the inevitable and guaranteed bad debt losses.
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Agree with what you say about "serious" money, though don't forget that size is a very relative concept!
As for being foolish to do P2P via an ISA ... not necessarily. I'd agree that S&S should definitely come first when it comes to using ISA allowance, but what if all of your S&S is already covered by an ISA wrapper or similar? In this case, if your portfolio has some un-tax-protected P2P in it, it may well be appropriate to use your remaining ISA allowance in wrapping up your P2P. It makes more sense than putting an ISA wrapper around cash, methinks.
Granted, this is unlikely to be the case for those blessed with larger portfolios (back to the "serious" money again), but remember we are in the land of retail here.
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ceejay
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Post by ceejay on Jan 29, 2019 23:39:51 GMT
Maybe I'm being thick here but I'm not sure I follow you ?
If "all of your S&S is already covered by ISA" then where does "use remaining ISA allowance" come from ? Surely I've either sent my stockbroker a full £20k ISA sub for the year or I haven't ?
I don't think you're being thick, but perhaps assuming that others are in the same position as you, which may not be the case.
Not everyone can generate £20k of new savings/investments every year!
If I have determined (by whatever process) that I desire X% of my funds to be in S&S, and that X% is already so invested, and already in an ISA wrapper (or similar), then I won't have any use for an S&S ISA.
This is most likely to be the case for someone in or near retirement, perhaps.
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ceejay
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Post by ceejay on Jan 30, 2019 9:47:36 GMT
I'm not entirely sure how to word this without it coming out all wrong, so try not to misconstrue it !
I'm not entirely convinced of the suitability of P2P for people who are unable to reach (or get near-ish) the ISA sub limit.
I can't help thinking that if full KYC was done on a representative sample of P2P lenders that they would have difficulty meeting one or more of the FCA suitability criteria, e.g.: - Financial situation - Attitude to risk - Capacity for loss - Experience of investments
The trouble is that if people are not already able to reach (or get near-ish) ISA sub for shares, then that means they're probably not making trades of reasonable size (not necessarily talking tens of thousands, but, say £5k+ per line). So I'm not entirely convinced about those people's ability to go into P2P if they haven't already proven their KYC credentials in the stockmarket.
Of course the stockmarket is not perfect, but it has a lot going for it in terms of maturity, regulatory environment, markets etc. The stockmarket also gives you the opportunity for growth & income, P2P only provides the latter.
P2P is still a very juvenile industry with a long road ahead on maturity, and so that's why I'm of the opinion that if people can't 'make it work' on the stockmarkets then P2P is only going to throw them additional challenges that quite frankly, if they were honest with themselves, they don't need in their lives.
I'm not tarnishing everyone with the same brush, but every time I visit this forum I seem to end up reading cringeworthy posts from people with totally skewed attitude to risk. I'm not saying you're one of them (infact I suspect you're not, I suspect you've quite happily decided you want some risk in your life ... whether I agree with you deliberatley underutilising your S&S ISA I don't know, but hey, its your money and YOLO as the cool kids say  ).
Thanks for the considered response.
I think I stand by my earlier comment that you've not quite got your head round people's situations that might be very different from your own, although I do agree that there are some quite very scary posts on here from people who do not seem to understand risk.
First, your comment about S&S trade size ... yep, I agree, you shouldn't be investing just a few £k into just a few stocks. Which is why most (by number of investors, not necessarily by value of investments) S&S investors go through UTs or variants thereof. The vast majority of retail investors don't have the time or skills or tools for stock-picking, and they know this. (There is an argument for saying that the "experts" don't either, but that's another matter).
So if, for the sake of argument, I had £20k/yr of excess income to save/invest (which would put me hugely above the national average) then, as long as I already had an adequate cash reserve base, it would be entirely reasonable to allocate say £10k of that to S&S (eg an index tracker) and the rest to P2P and cash. Result - unused S&S ISA allowance.
Here's another example: anyone in retirement. In this case, excess income could very easily be zero or even negative. If you've got your retirement planning right, this is probably where you want to be, in fact - the last thing you want is to be creating taxable income that you don't actually need. Far better to draw down only as needed. So, in this instance, once you have used your allowances to shelter ALL of your S&S holdings, what's next? Shelter your P2P. And then, once that's all done, your cash.
Everyone's circumstances are different...
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