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Post by twoseat on May 25, 2017 9:32:39 GMT
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kaya
Member of DD Central
Posts: 1,150 
Likes: 718
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Post by kaya on May 25, 2017 9:36:58 GMT
Another core reason to disinvest, methinks.
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Post by misotu on May 25, 2017 9:37:32 GMT
Yes ... interesting that my email says "The (Safeguard) fund was designed to ensure that investors only paid taxes on the net income they received from Zopa borrowers. In 2015 the tax laws were updated: enabling investors to claim for relief on losses from bad debt. As a result, the primary reason for Safeguard was removed, and we have taken the decision to retire the fund."
And there was me thinking that the primary reason for the Safeguard fund was to protect lenders from bad debt ...
And of course, with an IF ISA, there won't be any tax relief available since the interest isn't taxable.
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Post by misotu on May 25, 2017 9:40:41 GMT
Assuming that the Safeguard fund is sufficient to cover bad debts up to 1 December 2022, when the last Safeguard loan will mature, I wonder what happens to any remaining funds in the trust?
A windfall for someone ...
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Post by ogwellian on May 25, 2017 9:43:43 GMT
Due to heavy losses in Plus I'm now diverting payments to Classic where the lower returns are offset by Safeguard.
Have to think of somewhere else to go in December.
I'm already nearly six figures in both RS and AC, but prefer more diversification.
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Post by laidbackgjr on May 25, 2017 9:47:05 GMT
I'm amazed that there is very little information on how the IFISA is going to work given it's due to be available in a few weeks time. I'm happier with Zopa Core for which there seems more information on how it will work than for the ISA!- I feel that the costs of safeguard whilst nice for smoothing out returns does ultimately reduce the return on investment, so happy to go to Core myself for higher returns.
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dandy
Posts: 427
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Post by dandy on May 25, 2017 10:03:48 GMT
I think this a not just a great move but 100% necessary. RS surely have to follow. As Warren Buffet says its only when the tide goes out that you see who is swimming naked. Losses should be seen, felt and understood. Provision funds hide it until its too late ... and then we end up with rates like 2.8% for 5 years on unsecured consumer loans which is about as naked as you can get
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Post by gidoppp01 on May 25, 2017 10:06:22 GMT
IFISA just won't suit me at the moment, due to the ISA allowance.
Regarding Zopa plus, it's better to diversify into 500 loans to maximise returns.
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jo
Member of DD Central
dead
Posts: 741
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Post by jo on May 25, 2017 10:35:05 GMT
I guess if I'm looking for plusses (snigger), at least the withdrawal of Safeguard has been flagged with plenty of notice.
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Post by wyndstryke on May 25, 2017 17:13:58 GMT
IFISA just won't suit me at the moment, due to the ISA allowance. I was hoping that the IFISAs would have their own allowance, but it does look like they'll be sharing the same allowance with the other types of ISA.
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Post by wyndstryke on May 25, 2017 17:21:36 GMT
I'm amazed that there is very little information on how the IFISA is going to work given it's due to be available in a few weeks time. I'm happier with Zopa Core for which there seems more information on how it will work than for the ISA!- I feel that the costs of safeguard whilst nice for smoothing out returns does ultimately reduce the return on investment, so happy to go to Core myself for higher returns. There's some generic information about IFISAs here: innovativefinanceisa.org.uk/This was the page I found most useful (talking about the allowances / transfers / etc): innovativefinanceisa.org.uk/innovative-finance-isa-allowance-limits-limitations/
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Post by laidbackgjr on May 26, 2017 7:21:00 GMT
I'm amazed that there is very little information on how the IFISA is going to work given it's due to be available in a few weeks time. I'm happier with Zopa Core for which there seems more information on how it will work than for the ISA!- I feel that the costs of safeguard whilst nice for smoothing out returns does ultimately reduce the return on investment, so happy to go to Core myself for higher returns. There's some generic information about IFISAs here: innovativefinanceisa.org.uk/This was the page I found most useful (talking about the allowances / transfers / etc): innovativefinanceisa.org.uk/innovative-finance-isa-allowance-limits-limitations/Thanks - I wasn't really meaning generic IFISA stuff - I've already invested in the Lending Works IFISA last year - more in terms of how Zopa was going to work their's e.g. can I set it up so my current repayments in Plus & Presafeguard & Classic automatically get reinvested via the Zopa ISA - or do I need to withdraw as cash and put new cash straight in? or can you mix your Zopa ISA across Plus & Classic (or Core as it will become)?
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Post by WestonKevTMP on May 26, 2017 7:57:15 GMT
Yes ... interesting that my email says "The (Safeguard) fund was designed to ensure that investors only paid taxes on the net income they received from Zopa borrowers.... Absolute c*** I had just joined RateSetter when Zopa introduced the SafeGuard. It was a direct copy (immigration, flattery, etc.) because they saw it was popular with lenders. It gave confidence and the ability to provide specific returns without the vagaries of forecasted bad debt. Institutional lenders don't take SafeGuard protection as they prefer to boost returns by taking the risk.
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Post by portlandbill on May 26, 2017 8:04:49 GMT
Yes ... interesting that my email says "The (Safeguard) fund was designed to ensure that investors only paid taxes on the net income they received from Zopa borrowers.... Absolute c*** I had just joined RateSetter when Zopa introduced the SafeGuard. It was a direct copy (immigration, flattery, etc.) because they saw it was popular with lenders. It gave confidence and the ability to provide specific returns without the vagaries of forecasted bad debt. Institutional lenders don't take SafeGuard protection as they prefer to boost returns by taking the risk. "Zopa has created the Safeguard in order for you to get back all your money plus interest - without having to worry about a borrower paying you back. The Zopa Safeguard was created to step in and give you back all the money owed to you." - Zopa, 2013 (copied from ashe's post elsewhere.)
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dandy
Posts: 427
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Post by dandy on May 26, 2017 8:12:51 GMT
There was 2 reasons for the safeguard.
1. To cover losses. This has been proven to be a flawed model in the long term and only relevant for minimal diversification. Unless the PF is funded perfectly, it is BAD for lenders.
2. Remove tax issue which has now been alleviated.
Thinking abut it RS probably cannot scrap their PF as lenders are not diversified in the same way that they are with Zopa. In Zopa your funds are spread in ~ 1% chunks. With RS your money all goes to the next borrower/s in the list. Too risky with no PF as chance of losing all/most of capital on one bad loan.
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