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Post by mrdop on Feb 21, 2019 14:00:52 GMT
I have most of my P2P money in Zopa.
I was attracted by the early adapter bonus, the safeguard (at the time), and that they were the biggest.
I thinking of moving money out as they are not as attractive as they once were, but is spreading money around in P2P now just spreading risk that at least one will fail.
Are Zopa a safe bet because if they run into trouble they will be taken over/bailed out?
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Greenwood2
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Post by Greenwood2 on Feb 21, 2019 16:07:56 GMT
I have most of my P2P money in Zopa. I was attracted by the early adapter bonus, the safeguard (at the time), and that they were the biggest. I thinking of moving money out as they are not as attractive as they once were, but is spreading money around in P2P now just spreading risk that at least one will fail. Are Zopa a safe bet because if they run into trouble they will be taken over/bailed out? I think the main risk with Zopa is losing lenders due to poor rates, and less than predicted rates. But passing on the default risk to lenders mean they do not have a PF to support if there is a rise in defaults. I would say unlikely to fail, but returns may (have apparently for some) drop into the 'savings' range. It may just not be worth the risk/reward for many true P2P'ers. It will be interesting to see what their banking offerings are.
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aju
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Post by aju on Feb 21, 2019 16:29:12 GMT
I have most of my P2P money in Zopa. I was attracted by the early adapter bonus, the safeguard (at the time), and that they were the biggest. I thinking of moving money out as they are not as attractive as they once were, but is spreading money around in P2P now just spreading risk that at least one will fail. Are Zopa a safe bet because if they run into trouble they will be taken over/bailed out? I think the main risk with Zopa is losing lenders due to poor rates, and less than predicted rates. But passing on the default risk to lenders mean they do not have a PF to support if there is a rise in defaults. I would say unlikely to fail, but returns may (have apparently for some) drop into the 'savings' range. It may just not be worth the risk/reward for many true P2P'ers. It will be interesting to see what their banking offerings are. There is also a risk of defaults increasing with all this uncertainty for businesses and it does not help when companies like Honda decide to pull out. Honda itself has 3500 or so directly affected workers and some other quarters have indicated the knock on could affect another 7k+ depending who they quote. Couple Honda with other japanese companies in the UK pulling back as well for whatever reason then people losing jobs is not good for our loans base. Ok so this one event may not affect P2P immediately but it's always a risk. I've started to pull back on invest side of things myself partly due to over subscription on ISA side recently and risk/concern levels. I am moving money into RS as they have a PF whilst also realising that that is not necessarily safe either. So far in Zopa we have been relatively lucky but this month is not looking good for my Invest side, it will be negative for the first time since 2005 when I started with Zopa. That said overall we are still getting better than bank saving and beating inflation by quite a bit. Whilst Zopa's rates are down this year it's not looking too bad but as Greenwood2 says its not been that great for everyone just read the Zopa forums. We have been using a 20/80 rule recently for Plus/Other but are considering dropping that to 10/90 in our ISA's. On RS side whilst still new we are bettering these rates by quite a margin and with PF cover will be safer than Zopa, theoretically anyway as its still not guaranteed safety. Its worth saying I am having to do things manually on RS to get those "good" rates and its also very early days on there for us so more learning. The rest of our slow Invest side withdrawal will probably be fed into Marcus and Mrs Aju will most likely spend some of it too. 
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Post by newlender on Feb 21, 2019 18:09:53 GMT
I suppose it all depends on the % of your total funds that is invested in P2P. Last week on his TV programme Martin Lewis said that he had turned lukewarm on this asset class after being somewhat bullish in the past. I am reducing my exposure to about 8%-10% of my funds, almost all in Zopa. I doubt that Zopa is any more or less likely to fail than any of the others in the event of a serious downturn in the economy and we always have to remember that there is no FSCS cover so it's a question of whether or not the risk is worth the better rates. Probably only just at the moment.
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Post by gravitykillz on Feb 22, 2019 20:04:48 GMT
If northern rock got screwed, zopa will get ultra screwed. If its business model fails.
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Post by gravitykillz on Feb 22, 2019 20:07:17 GMT
If anyone is unsure national savings is the best place to put their money.
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Post by davee39 on Feb 22, 2019 20:15:56 GMT
Why would Zopa get bailed out if it failed? They cannot make a convincing profit despite many years of operation. With low interest rates likely for several more years, and a looming recession, the current rates look unattractive.
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Post by gravitykillz on Feb 22, 2019 20:26:11 GMT
Because zopa recently got a banking licence. There is confusion among zopa p2p lenders. P2p money is not protected by the government.
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Post by gravitykillz on Feb 22, 2019 20:27:41 GMT
Why am i on this board i dont even invest in zopa.
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Post by gravitykillz on Feb 22, 2019 20:28:51 GMT
Lending works is the best !!!!
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ashtondav
Member of DD Central
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Post by ashtondav on Feb 22, 2019 20:43:47 GMT
Why am i on this board i dont even invest in zopa.  !
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Post by gravitykillz on Feb 22, 2019 21:39:19 GMT
😁
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benaj
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Post by benaj on Feb 23, 2019 8:46:25 GMT
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Post by fuzzyiceberg on Feb 23, 2019 9:50:54 GMT
And of course Zopa is just a platform. Even if Zopa went bust our borrowers and their liability to repay their loans continue to exist. Of course someone who 'takes over' may charge more than Zopa's 1% to collect and distribute loan repayments, but the real risk (as for all non secured P2P) remains a downturn in peoples ability to service their loan commitments leading to a rise in defaults.
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Post by propman on Feb 28, 2019 12:10:26 GMT
And of course Zopa is just a platform. Even if Zopa went bust our borrowers and their liability to repay their loans continue to exist. Of course someone who 'takes over' may charge more than Zopa's 1% to collect and distribute loan repayments, but the real risk (as for all non secured P2P) remains a downturn in peoples ability to service their loan commitments leading to a rise in defaults. Precisely. The one thing I would say is that the non-PF model for Zopa should mean that the losses are more spread and that money continues to come in from performing loans. If things go South, LW & RS might start holding a proportion of repayments to top up the PF with partial payouts from the PF from defaults only! As I have said before, I think of LW & RS as akin to catastrophe bonds. They will continue to pay out agreed rates up to the recognition of the catastrophe probably tweaking expected bad debt rates below realistic levels as things initially deteriorate in the hope that PF funds from current loans are sufficient to keep PF above water. Unless it is a very marginal shortfall, stopping paying out interest will take many years to recover from and might be largely the end of lending. We have all seen people over react to defaults, getting defaults when this was thought unlikely will cause a much greater reaction. Expect funds to be required for withdrawals for some time! As a high proportion of their income is arrangement fees, this might break them.
That said, Zopa loans are highly funded from institutional money. RS found this dried up when returns deteriorated below expectations. I suspect this may be Zopa's achilles heel.
- PM
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