markb
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Post by markb on Apr 3, 2020 13:30:33 GMT
I expect that in practice, a big factor will be how AC choose to report the figures to HMRC and on the downloadable tax statement. If those report the reduced interest figures, then the tax deductibility will naturally follow from that. Whereas if those report the interest figures at the prior level, and each lender then has to argue the toss with HMRC regarding the deductibility, it'll be a lot more painful.
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lek28
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Post by lek28 on Apr 7, 2020 11:31:14 GMT
Please tell me after all you are the one with this information To have received a penny more under the pro-rata system than the flat rate system, with the payments made so far, my estimate is that you'd need to have over £85k invested in a single access account. Under that and you've benefitted from the flat rate system. I also estimate that if you have under £1m invested in a single access account then your time to 100% return of capital would be quicker with the flat rate system. The reasoning for the flat rate system was much like a bank putting a withdrawal limit in place, or supermarkets rationing toilet paper. It's not designed to punish those with deep pockets, its aim is to spread liquidity during a time when it's restricted. As liquidity improves we'll switch to a different solution, such as pro-rata or queue order, until such time as the restrictions can be lifted entirely. - Maybe it’s my starting assumptions, but back of the envelope, the £85k seems way off. Assuming there are 15k investors and £63m of funds invested (broadly accurate per the AC website), let’s then say that each investor receives a £100 distribution. This implies a £1.5m total distribution across QAA investors or 2.38% of invested funds (1.5/63). If the distribution were made on a PRO RATA basis, then an investor with an £85k holding would receive £2,023 (2.38% x £85k). Instead the “breakeven” level of holdings under these assumptions is only £4,200. Can you please clarify what the £85k is meant to represent and where you see the discrepancy with the above calculation? Thanks!
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alanh
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Post by alanh on Apr 7, 2020 13:08:37 GMT
To have received a penny more under the pro-rata system than the flat rate system, with the payments made so far, my estimate is that you'd need to have over £85k invested in a single access account. Under that and you've benefitted from the flat rate system. I also estimate that if you have under £1m invested in a single access account then your time to 100% return of capital would be quicker with the flat rate system. The reasoning for the flat rate system was much like a bank putting a withdrawal limit in place, or supermarkets rationing toilet paper. It's not designed to punish those with deep pockets, its aim is to spread liquidity during a time when it's restricted. As liquidity improves we'll switch to a different solution, such as pro-rata or queue order, until such time as the restrictions can be lifted entirely. - Maybe it’s my starting assumptions, but back of the envelope, the £85k seems way off. Assuming there are 15k investors and £63m of funds invested (broadly accurate per the AC website), let’s then say that each investor receives a £100 distribution. This implies a £1.5m total distribution across QAA investors or 2.38% of invested funds (1.5/63). If the distribution were made on a PRO RATA basis, then an investor with an £85k holding would receive £2,023 (2.38% x £85k). Instead the “breakeven” level of holdings under these assumptions is only £4,200. Can you please clarify what the £85k is meant to represent and where you see the discrepancy with the above calculation? Thanks! It seems clear that they £85k number is way off and is much lower Chris even describes it in the above post as "my estimate" Some kind of justification or calculation as to how it has been arrived at would be nice but there is very little chance of Assetz providing anything so I think investors will have to draw their own conclusions and make their own calcs.
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Post by arallu on Apr 7, 2020 13:17:04 GMT
To have received a penny more under the pro-rata system than the flat rate system, with the payments made so far, my estimate is that you'd need to have over £85k invested in a single access account. Under that and you've benefitted from the flat rate system. I also estimate that if you have under £1m invested in a single access account then your time to 100% return of capital would be quicker with the flat rate system. The reasoning for the flat rate system was much like a bank putting a withdrawal limit in place, or supermarkets rationing toilet paper. It's not designed to punish those with deep pockets, its aim is to spread liquidity during a time when it's restricted. As liquidity improves we'll switch to a different solution, such as pro-rata or queue order, until such time as the restrictions can be lifted entirely. - Maybe it’s my starting assumptions, but back of the envelope, the £85k seems way off. Assuming there are 15k investors and £63m of funds invested (broadly accurate per the AC website), let’s then say that each investor receives a £100 distribution. This implies a £1.5m total distribution across QAA investors or 2.38% of invested funds (1.5/63). If the distribution were made on a PRO RATA basis, then an investor with an £85k holding would receive £2,023 (2.38% x £85k). Instead the “breakeven” level of holdings under these assumptions is only £4,200. Can you please clarify what the £85k is meant to represent and where you see the discrepancy with the above calculation? Thanks! I think your maths is flawed. The amount received on a pro-rata basis depends on how many queued withdrawals there are, and how much is queued by the biggest investors. I've made a very simple example below... Say the withdrawal queue is £1,100,000 in total, with five investors in the queue. Each investor has the following amount queued for withdrawal (with the percentage showing each investor's ratio of the total withdrawal queue): Investor one - £5,000 (0.45%) Investor two - £20,000 (1.82%) Investor three - £75,000 (6.82%) Investor four - £200,000 (18.18%) Investor five - £800,000 (72.73%) If £20,000 is then released to these investors, with the current method that AC are using, each investor would receive £4,000. If a pro-rata method is used, each investor would receive: Investor one - £90 Investor two - £364 Investor three - £1,364 Investor four - £3,636 Investor five - £14,546 So, in my example, the only person who is better off in a pro-rata system is investor five. Obviously the actual AC withdrawal queue will have a completely different make up, but I would trust the figures Chris has posted as largely correct.
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sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Apr 7, 2020 13:17:47 GMT
chris - Maybe it’s my starting assumptions, but back of the envelope, the £85k seems way off. Assuming there are 15k investors and £63m of funds invested (broadly accurate per the AC website), let’s then say that each investor receives a £100 distribution. This implies a £1.5m total distribution across QAA investors or 2.38% of invested funds (1.5/63). If the distribution were made on a PRO RATA basis, then an investor with an £85k holding would receive £2,023 (2.38% x £85k). Instead the “breakeven” level of holdings under these assumptions is only £4,200. Can you please clarify what the £85k is meant to represent and where you see the discrepancy with the above calculation? Thanks! It seems clear that they £85k number is way off and is much lower Chris even describes it in the above post as "my estimate" Some kind of justification or calculation as to how it has been arrived at would be nice but there is very little chance of Assetz providing anything so I think investors will have to draw their own conclusions and make their own calcs. The £85k is an FSCS protection, that doesn't apply to P2P access accounts. The access accounts are not cash they are investments in loans, just look at your loan holding breakdown for each access account by by clicking on the burger icon in bottom left - your loan holdings.
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alanh
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Post by alanh on Apr 7, 2020 13:20:40 GMT
It seems clear that they £85k number is way off and is much lower Chris even describes it in the above post as "my estimate" Some kind of justification or calculation as to how it has been arrived at would be nice but there is very little chance of Assetz providing anything so I think investors will have to draw their own conclusions and make their own calcs. The £85k is an FSCS protection, that doesn't apply to P2P access accounts. The access accounts are not cash they are investments in loans, just look at your loan holding breakdown for each access account by by clicking on the burger icon in bottom left - your loan holdings. No one has suggested there is any FSCS protection. Chris came up with the £85k figure which, by chance, also happens to be the FSCS protection limit but that is not what anyone is talking about.
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cb25
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Post by cb25 on Apr 7, 2020 13:25:29 GMT
The £85k is an FSCS protection, that doesn't apply to P2P access accounts. The access accounts are not cash they are investments in loans, just look at your loan holding breakdown for each access account by by clicking on the burger icon in bottom left - your loan holdings. No one has suggested there is any FSCS protection. Chris came up with the £85k figure which, by chance, also happens to be the FSCS protection limit but that is not what anyone is talking about. sqh It was from a post by Chris on Mar 31, 2020 at 11:55pm in this thread:
"As per the figures in my previous post, you need to have over £85k invested in a single account to have received more cash via pro-rata allocation. Each account is allocated separately at present, so you could have that £80-85k in each of the three access accounts, hence the £240-255k figure.
This was calculated by running the calculation through the system, so I can't really show the working. You'll have to take it or leave it, it wasn't actually the reason for the decision to implement the flat allocation, I gave that reasoning before, I was just curious so ran the numbers. Heading to bed now so won't reply again, but will try and spend some more time on the forum tomorrow albeit with a more technical hat on."
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alanh
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Post by alanh on Apr 7, 2020 13:26:52 GMT
chris - Maybe it’s my starting assumptions, but back of the envelope, the £85k seems way off. Assuming there are 15k investors and £63m of funds invested (broadly accurate per the AC website), let’s then say that each investor receives a £100 distribution. This implies a £1.5m total distribution across QAA investors or 2.38% of invested funds (1.5/63). If the distribution were made on a PRO RATA basis, then an investor with an £85k holding would receive £2,023 (2.38% x £85k). Instead the “breakeven” level of holdings under these assumptions is only £4,200. Can you please clarify what the £85k is meant to represent and where you see the discrepancy with the above calculation? Thanks! I think your maths is flawed. The amount received on a pro-rata basis depends on how many queued withdrawals there are, and how much is queued by the biggest investors. I've made a very simple example below... Say the withdrawal queue is £1,100,000 in total, with five investors in the queue. Each investor has the following amount queued for withdrawal (with the percentage showing each investor's ratio of the total withdrawal queue): Investor one - £5,000 (0.45%) Investor two - £20,000 (1.82%) Investor three - £75,000 (6.82%) Investor four - £200,000 (18.18%) Investor five - £800,000 (72.73%) If £20,000 is then released to these investors, with the current method that AC are using, each investor would receive £4,000. If a pro-rata method is used, each investor would receive: Investor one - £90 Investor two - £364 Investor three - £1,364 Investor four - £3,636 Investor five - £14,546 So, in my example, the only person who is better off in a pro-rata system is investor five. Obviously the actual AC withdrawal queue will have a completely different make up, but I would trust the figures Chris has posted as largely correct. Your calculations are fine, but they do not provide any justification of Chris' £85k figure whatsoever. You would need to be using actual data from AC to do that. You simply show that "the big guy loses out" - whereas the question is "how big is that guy"?
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Post by arallu on Apr 7, 2020 13:30:32 GMT
I think your maths is flawed. The amount received on a pro-rata basis depends on how many queued withdrawals there are, and how much is queued by the biggest investors. I've made a very simple example below... Say the withdrawal queue is £1,100,000 in total, with five investors in the queue. Each investor has the following amount queued for withdrawal (with the percentage showing each investor's ratio of the total withdrawal queue): Investor one - £5,000 (0.45%) Investor two - £20,000 (1.82%) Investor three - £75,000 (6.82%) Investor four - £200,000 (18.18%) Investor five - £800,000 (72.73%) If £20,000 is then released to these investors, with the current method that AC are using, each investor would receive £4,000. If a pro-rata method is used, each investor would receive: Investor one - £90 Investor two - £364 Investor three - £1,364 Investor four - £3,636 Investor five - £14,546 So, in my example, the only person who is better off in a pro-rata system is investor five. Obviously the actual AC withdrawal queue will have a completely different make up, but I would trust the figures Chris has posted as largely correct. Your calculations are fine, but they do not provide any justification of Chris' £85k figure whatsoever. You would need to be using actual data from AC to do that. You simply show that "the big guy loses out" - whereas the question is "how big is that guy"? Are you expecting AC to publicly release the number of investors in the withdrawal queue, and the amount they are each withdrawing? That's the only way to confirm the £85k figure.
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alender
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Post by alender on Apr 7, 2020 13:34:07 GMT
chris - Maybe it’s my starting assumptions, but back of the envelope, the £85k seems way off. Assuming there are 15k investors and £63m of funds invested (broadly accurate per the AC website), let’s then say that each investor receives a £100 distribution. This implies a £1.5m total distribution across QAA investors or 2.38% of invested funds (1.5/63). If the distribution were made on a PRO RATA basis, then an investor with an £85k holding would receive £2,023 (2.38% x £85k). Instead the “breakeven” level of holdings under these assumptions is only £4,200. Can you please clarify what the £85k is meant to represent and where you see the discrepancy with the above calculation? Thanks! I think your maths is flawed. The amount received on a pro-rata basis depends on how many queued withdrawals there are, and how much is queued by the biggest investors. I've made a very simple example below... Say the withdrawal queue is £1,100,000 in total, with five investors in the queue. Each investor has the following amount queued for withdrawal (with the percentage showing each investor's ratio of the total withdrawal queue): Investor one - £5,000 (0.45%) Investor two - £20,000 (1.82%) Investor three - £75,000 (6.82%) Investor four - £200,000 (18.18%) Investor five - £800,000 (72.73%) If £20,000 is then released to these investors, with the current method that AC are using, each investor would receive £4,000. If a pro-rata method is used, each investor would receive: Investor one - £90 Investor two - £364 Investor three - £1,364 Investor four - £3,636 Investor five - £14,546 So, in my example, the only person who is better off in a pro-rata system is investor five. Obviously the actual AC withdrawal queue will have a completely different make up, but I would trust the figures Chris has posted as largely correct. This does not bear out what is happening, as I say keep copies of your old loan books, check which loans have repaid say in one week and and check how much you have been paid in the week then check what proportion this represents.. From yesterday the loan repayments for #628, the investors better of in a Pro Rata system was approx > 13K
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Post by arallu on Apr 7, 2020 13:36:51 GMT
I think your maths is flawed. The amount received on a pro-rata basis depends on how many queued withdrawals there are, and how much is queued by the biggest investors. I've made a very simple example below... Say the withdrawal queue is £1,100,000 in total, with five investors in the queue. Each investor has the following amount queued for withdrawal (with the percentage showing each investor's ratio of the total withdrawal queue): Investor one - £5,000 (0.45%) Investor two - £20,000 (1.82%) Investor three - £75,000 (6.82%) Investor four - £200,000 (18.18%) Investor five - £800,000 (72.73%) If £20,000 is then released to these investors, with the current method that AC are using, each investor would receive £4,000. If a pro-rata method is used, each investor would receive: Investor one - £90 Investor two - £364 Investor three - £1,364 Investor four - £3,636 Investor five - £14,546 So, in my example, the only person who is better off in a pro-rata system is investor five. Obviously the actual AC withdrawal queue will have a completely different make up, but I would trust the figures Chris has posted as largely correct. This does not bear out what is happening, as I say keep copies of your old loan books, check which loans have repaid say in one week and and check how much you have been paid in the week then check what proportion this represents.. From yesterday the loan repayments for #628, the investors better of in a Pro Rata system was approx > 13K You can't say that without knowing the makeup of the withdrawal queue. If one person has a withdrawal request for £20mil, then pro rata would be worse for the vast majority of investors.
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Post by Harland Kearney on Apr 7, 2020 13:42:25 GMT
Without more data for other vairbles, its impossible to accurately say what the cut off point is to benefit from pro-rata, other than agree there is one.
On a flip note, both AC, Chris and Stuat said that the current system is only for a short period of time until more liquidity and certainty is installed. They repeated this a few times on a diff threads and its on the FAQ. Although I can understand why some posters don't like that answer cause alot of things have been changed/altered at the flip of the weather of past weeks.
We will likely see more info in the coming weeks from AC I am sure,
I looked though my payouts, yes you are correct, the largest payouts were when loans were repaid. However the amount of cash between them was radically different, and not in a time line order either. We have no idea why specfically, although a few factors have been pointed too ofc.
Obviously loan size is a factor, goes without saying.
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alanh
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Post by alanh on Apr 7, 2020 13:54:35 GMT
Without more data for other vairbles, its impossible to accurately say what the cut off point is to benefit from pro-rata, other than agree there is one. On a flip note, both AC, Chris and Stuat said that the current system is only for a short period of time until more liquidity and certainty is installed. They repeated this a few times on a diff threads and its on the FAQ. Although I can understand why some posters don't like that answer cause alot of things have been changed/altered at the flip of the weather of past weeks. We will likely see more info in the coming weeks from AC I am sure, I looked though my payouts, yes you are correct, the largest payouts were when loans were repaid. However the amount of cash between them was radically different, and not in a time line order either. We have no idea why specfically, although a few factors have been pointed too ofc. Obviously loan size is a factor, goes without saying. There is no sign of liquidity improving, in fact it is getting worse if you look at the payouts we are receiving. So if they are waiting to change the payout system until liquidity improves then that is going to be a very long time or possibly never. All other platforms with queues have kept the queue system and consequently have maintained confidence in the longevity and integrity of the platform. Assetz overnight rule changes and preferential payouts have done completely the opposite.
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Post by Harland Kearney on Apr 7, 2020 14:01:31 GMT
Without more data for other vairbles, its impossible to accurately say what the cut off point is to benefit from pro-rata, other than agree there is one. On a flip note, both AC, Chris and Stuat said that the current system is only for a short period of time until more liquidity and certainty is installed. They repeated this a few times on a diff threads and its on the FAQ. Although I can understand why some posters don't like that answer cause alot of things have been changed/altered at the flip of the weather of past weeks. We will likely see more info in the coming weeks from AC I am sure, I looked though my payouts, yes you are correct, the largest payouts were when loans were repaid. However the amount of cash between them was radically different, and not in a time line order either. We have no idea why specfically, although a few factors have been pointed too ofc. Obviously loan size is a factor, goes without saying. There is no sign of liquidity improving, in fact it is getting worse if you look at the payouts we are receiving. So if they are waiting to change the payout system until liquidity improves then that is going to be a very long time or possibly never. All other platforms with queues have kept the queue system and consequently have maintained confidence in the longevity and integrity of the platform. Assetz overnight rule changes and preferential payouts have done completely the opposite. Without more data, its hard to say. I think even if AC kept say a normal queue system like we see on RS, it will not have helped. My view on the queue system right now is because AC loans are not going to be repaying, such a strat would simply mean all payout cash would be going to one big whale stuck in the queue for the next weeks/months. It maybe fair, but it isn't practical. I think if we all had £0 payouts for the next 6 weeks (as most of us would in current liqudity) this forum might very well have even more anger that it does already. For pro-rate my comments are same as above, you might be completely right or we might both be completely wrong without that data.  RS are having borrowers still repaying on a daily basis and looks like that will continue during this crisis; info on money going in is even more limited than AC right now to be honest. I do admire their daily comms about pays outs though, but I don't see how AC doing that would help right now at this point. Would just be random numbers some very big, others extremely small. Might cause more questions that answers. The platforms loan books are quite diffrent, the platforms who have locked down liqudity have loan books similar to AC (lending works as a example) and arent' even paying interest for the time being. Property/SME's.
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alender
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Post by alender on Apr 7, 2020 14:03:10 GMT
This does not bear out what is happening, as I say keep copies of your old loan books, check which loans have repaid say in one week and and check how much you have been paid in the week then check what proportion this represents.. From yesterday the loan repayments for #628, the investors better of in a Pro Rata system was approx > 13K You can't say that without knowing the makeup of the withdrawal queue. If one person has a withdrawal request for £20mil, then pro rata would be worse for the vast majority of investors. What you can say is if I had a loan in QAA loan book #xyz which is all in the withdraw queue of £100, the loan is repaid so as this is my loan I should get £100. I get £55, where is my other £45 gone (as I say this is my loan as this is or at least is meant to be if this is P2P). A smaller investor has the #xyz of £10 in their loan book, they get £55. The additional £45 that the small lender gets is taken from loans in their loan book which then ends up in my Loan book.
So far all of my repayments have been less than the repaid loans and my money in the QAA withdrawal queue is significantly less than the 85K, therefore how can 85K be the break even point.
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