Octopus Choice launches innovative finance ISA

By Bridging Loan Directory 9th August 2017

In a low interest rate environment and with ongoing market volatility, UK investors may wish to look beyond traditional stocks and shares investments. To help fill this gap, Octopus Choice, the peer-to-peer (P2P) lending product that provides capital for investment in real estate loans and is distributed by Octopus Investments, announces the launch of its Innovative Finance ISA (IFISA).

The Octopus Choice ISA allows investors to target a variable interest rate of around four per cent per year, tax-free, on investments within their annual ISA allowance (currently £20,000 2017/18 Tax Year).

Investors can choose an amount from as little as £10, which will be invested by Octopus in carefully selected loans secured against property in the UK and underwritten by its award-winning lending team, Octopus Property. Octopus Property has lent over £2.6 billion since its launch in 2009, with a default rate of less than 0.01 per cent. (Remember, past performance is not a reliable indicator of future results.)

Octopus also invests five per cent in each loan at first loss, meaning investors can get their initial investment back first, and receive interest due to them before Octopus earns any. Investors are not charged any up-front or ongoing fees to invest with Octopus Choice.

Commenting, Sam Handfield-Jones, Head of Octopus Choice, said:

“I believe at a time of low interest rates, rising inflation and ever-present stock market instability, an alternative tax-efficient investment solution has never been more important or valuable to investors. We are thrilled that we can now help them include Octopus Choice within their ISA planning.

“Since we launched Octopus Choice in April 2016, it has become one of the UK’s fastest-growing P2P products, having already facilitated over £130 million of lending across nearly 200 loans to date. The Octopus Choice ISA offers investors exactly the same product but within the ISA wrapper, and we expect today’s launch to bolster the impressive demand we have already witnessed for this product.”

Mario Berti, pictured, CEO Octopus Property, added:

“We continue to see robust demand from high-quality borrowers across all areas of our business and have just completed our most comprehensive product review since we launched in 2009.

“As part of our unique Lifecycle Lending proposition we have launched a range of new products to help ensure that we offer competitively priced, flexible lending solutions to our borrowers. In order to support the demand for our widened product range we have continued to grow the Octopus Property team, thus helping to ensure that our coverage, market knowledge and underwriting capacity remains first class.

“We believe that the fundamental shortage of housing in the UK will continue to support the UK real estate market over the long term and are confident that the Octopus Choice ISA provides an ever-widening investor group with access to this important asset class. Our track record in the market and the first loss investment made in every loan by Octopus is clear evidence of this.”

The Innovative Finance ISA was launched on 6 April 2016 as a new addition to the growing stable of ISA options. The IFISA allows savers to use some or part of their annual ISA investment allowance (currently £20,000 2017/18 tax year) to receive tax-free interest on funds lent through FCA-regulated peer-to-peer lending platforms. Octopus Choice was granted full authorisation at the beginning of the year.

Investors can split their 2017/18 £20,000 ISA allowance across multiple forms of ISA investing including but not limited to cash, stocks & shares and Innovative Finance ISA. However, the combined amount invested during the tax year must not exceed the limit.