webwiz
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Post by webwiz on Feb 17, 2015 21:01:05 GMT
Many (most?) of us will have used up our ISA allowance for 2014-15 so will not be able to put cash into this. Wellesley say that they will accept transfers in from existing cash ISAs but when I tried to open an account it was not possible without putting in cash.
Has anyone cracked this? I have some cash ISAs paying next to nothing. I don't want to cash them in as I would lose the tax wrapper for ever, so I was hanging on hoping that p2p ISAs would become available.
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Post by Come_on_Grandad on Feb 17, 2015 21:08:26 GMT
Many (most?) of us will have used up our ISA allowance for 2014-15 so will not be able to put cash into this. Wellesley say that they will accept transfers in from existing cash ISAs but when I tried to open an account it was not possible without putting in cash. Has anyone cracked this? I have some cash ISAs paying next to nothing. I don't want to cash them in as I would lose the tax wrapper for ever, so I was hanging on hoping that p2p ISAs would become available. I didn't spend very long on their website, but recall .. www.epml.co.uk/individual-savings-plan/howtoinvest which advises you to pick up the telephone.
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webwiz
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Post by webwiz on Feb 17, 2015 21:13:13 GMT
Many (most?) of us will have used up our ISA allowance for 2014-15 so will not be able to put cash into this. Wellesley say that they will accept transfers in from existing cash ISAs but when I tried to open an account it was not possible without putting in cash. Has anyone cracked this? I have some cash ISAs paying next to nothing. I don't want to cash them in as I would lose the tax wrapper for ever, so I was hanging on hoping that p2p ISAs would become available. I didn't spend very long on their website, but recall .. www.epml.co.uk/individual-savings-plan/howtoinvest which advises you to pick up the telephone. Thanks CoG. But I have already sent them an email so I will give them a chance to respond.
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Post by davee39 on Feb 17, 2015 21:26:35 GMT
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Post by bobthebuilder on Feb 18, 2015 6:46:47 GMT
The Daily Mail article is indeed well written, although I'm not sure about this quote from the Wellesley spokesman: "And, if Wellesley went bust, how would lenders and bondholders be treated? A spokesman said: 'They are completely ‘pari-passu’ i.e. treated on an equal footing. In the unlikely event Wellesley went bust, the company has a security trustee that would manage the run-off of its loan book." During the run-down of its loan book I presume that your ISA holding would continue to be administered by European Pensions Management (EPM), and a pdf file linked to in Wellesley's FAQs makes it clear that if Wellesley ceased trading, EPM would levy an annual admin fee of £250 + VAT, payable in advance. The 30 days' notice they say they will give you of this charge means nothing if you can't get your money out while the loan book is being run down. I'm not aware of a similar charge being levied by the security trustee on non-ISA investments. The hefty £100 + VAT charge for transfers out also seems to apply even if Wellesley don't cease trading. support.wellesley.co.uk/hc/en-gb/article_attachments/201682805/Wellesley_EPM_New_ISA_Supplementary_Charging_Schedule_Final.pdf |
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Post by davee39 on Feb 18, 2015 10:37:15 GMT
Wellesley think they are being very clever with this product.
Most lenders will not go through the small print and charges.
The financial engineering of an Irish listed bond & their departure from the peer to peer finance association have confirmed my decision to pull out as funds mature. After very long consideration I have decided to plump for the Assetz green account for this portion of my funds.
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Post by 4thway on Feb 18, 2015 11:12:54 GMT
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Post by 4thway on Feb 18, 2015 11:14:26 GMT
Oh, I should emphasise that the article is not an assessment of the ISA bond and whether you should invest in it; the article is just to highlight what appear to me to be the key differences. between the bond and P2P lending.
That said, if you have any specific questions about the bonds for your own assessment of whether to use them, I might well be able to answer them after having read the prospectus, so fire away.
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webwiz
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Post by webwiz on Feb 18, 2015 12:25:17 GMT
There are two 5 year accounts one which pays 5.25% monthly and one which pays 6% at term. Both of which are equivalent to 5.39% AER. Did you use an on-line calculator to compute this? If so please point me at it. i suppose that you have assumed that the monthly payments can be reinvested on the same terms?
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webwiz
Posts: 1,133
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Post by webwiz on Feb 18, 2015 12:28:57 GMT
Oh, I should emphasise that the article is not an assessment of the ISA bond and whether you should invest in it; the article is just to highlight what appear to me to be the key differences. between the bond and P2P lending. That said, if you have any specific questions about the bonds for your own assessment of whether to use them, I might well be able to answer them after having read the prospectus, so fire away. It must be different to p2p else it could not (yet) be in an ISA.
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Post by mrclondon on Feb 18, 2015 13:56:12 GMT
Both of which are equivalent to 5.39% AER. Did you use an on-line calculator to compute this? If so please point me at it. i suppose that you have assumed that the monthly payments can be reinvested on the same terms? Calculated using Excel's XIRR formula which will be accurate to +/- 0.01 %. See this post of mine from last December for the full table of rates. The rates (AER) offered by W&Co for both monthly and maturity intrest are essentially the same. The advantage of the maturity interest option is the ability to defer the tax liability into a future tax year (e.g. after retirement) Yes, the AER calc of monthly interest assumes compounding at the same rate.
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kermie
Member of DD Central
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Post by kermie on Feb 18, 2015 18:22:49 GMT
Useful article - your subscribers will appreciate it. What I don't really like is the somewhat misleading marketing approach taken by Wellesley here - yes, it's a retail bond, but using "P2P" is somewhat misleading. Its like Tesco describing their retail bond as a "Tesco Grocery ISA Bond". The 'grocery' part is just their business model, and you ain't buying groceries with that bond! In fact, I don't like the term "bond" at all really - I'd much rather see retail bonds described as "corporate loans". "Bond" makes them sound way too safe! You can see why I'm not in marketing! 
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Post by 4thway on Feb 19, 2015 8:42:50 GMT
Useful article - your subscribers will appreciate it. ...Its like Tesco describing their retail bond as a "Tesco Grocery ISA Bond". The 'grocery' part is just their business model, and you ain't buying groceries with that bond!... Thanks kermie! Oh, I like that! I'll have to quote that in my article.
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Post by bobthebuilder on Feb 20, 2015 0:06:38 GMT
Did you use an on-line calculator to compute this? If so please point me at it. i suppose that you have assumed that the monthly payments can be reinvested on the same terms? Calculated using Excel's XIRR formula which will be accurate to +/- 0.01 %. See this post of mine from last December for the full table of rates. The rates (AER) offered by W&Co for both monthly and maturity intrest are essentially the same. The advantage of the maturity interest option is the ability to defer the tax liability into a future tax year (e.g. after retirement) ------------------------------------------------------------------------------------------------------------------------------------------------------------- Alternatively you can use a scientific calculator to derive similar results from the standard compound interest formula A = P (1 + R/100) ^ T, where A is the accrued amount, P is principal, R is rate of interest and T is time (i.e. number of periods). Bear in mind that R and T have to be consistent with each other, so that if T is a number of months, then R must be a monthly interest rate. Taking as an example W’s 5 year product with a 5.25% monthly interest rate and a 6.00% interest rate when interest is paid only on maturity, it can be seen that the two rates are almost exactly equivalent. The total interest paid at maturity is 5 years x 6.00% = 30%, which is equivalent to a monthly rate of (1.30 ^ (1/60) – 1) * 12 = 5.25877%. The AER on the monthly rate of 5.25% is (1 + 5.25/1200) ^ 12 – 1 = 5.37819%, or 5.38% to 2 decimal places, and the AER on the calculated monthly equivalent rate of 5.25877% is (1 + 5.25877/1200) ^ 12 – 1 = 5.38739%, or 5.39% to 2 decimal places. Both of these figures are confirmed by Excel’s XIRR function (happily  ).
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2boi
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Post by 2boi on Jun 17, 2015 2:51:23 GMT
I'm a bit late coming to this but I think you have confused the Wellesley ISA with the Wellesley mini bond. The mini bond is indeed not P2P lending, it is a risky retail bond - "Funds used for lending and business expansion". The ISA however is different - " Bond proceeds can only be used to make loans that are secured against tangible assets". Unlike the mini bond all the funds are used for p2p loans. This is also covered in the 'This is Money' article at www.thisismoney.co.uk/money/investing/article-2956979/Should-invest-Wellseley-s-P2P-retail-bonds.html"And, if Wellesley went bust, how would [p2p] lenders and [ISA] bondholders be treated?
A spokesman said: 'They are completely ‘pari-passu’ i.e. treated on an equal footing. In the unlikely event Wellesley went bust, the company has a security trustee that would manage the run-off of its loan book. All funds related to the bond issue are held in a secure bank account which is ring fenced from the rest of the Wellesley business.'"
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