As the Founder of SIPPclub, having helped many of our Members lend millions of pounds of SIPP and SSAS money on peer-to-peer platforms, I couldn’t resist RateSetter’s Limited Offer to collect a £100 bonus and an interest rate of up to 5.9 per cent.
With interest rates remaining pitifully low, it’s well worth taking a look at the Limited Bonus Offer from RateSetter, to collect a bonus of £100 and an interest rate of up to 5.9 per cent on your cash.
RateSetter is one of the world’s largest and most respected peer-to-peer platforms, connecting lenders and borrowers via its beautifully simple online platform, cutting out the banks in the process.
Lenders like you and me can secure attractive returns of up to 5.9 per cent, over terms of virtual instant access to five years.
To attract new lenders, RateSetter is currently running a time Limited Offer which pays a £100 Bonus to anyone depositing £1,000 for at least a year. That’s in addition to the interest you’ll earn on your money.
Many banks offer similar bonuses to new customers, but they often insist you switch your banking to secure the incentive. It can be a real hassle, especially if you have direct debits and standing orders to switch. Not so with RateSetter.
RateSetter claims you can open an account and fund it in five minutes. Actually, it took me just under three minutes to set up my account and transfer the cash from my current account.
What was even more impressive is that two minutes later, my money had been matched and my bonus and my potential interest was confirmed. Impressed? I certainly was.
RateSetter’s numbers are staggering. Since its launch in 2010, RateSetter has matched more than £2 billion. There are almost 60,000 individual lenders and not one of them has lost a single penny.
That’s due in part to effective underwriting of the loans, security from borrowers and a Provision Fund. The Provision Fund reimburses lenders if a borrower misses a payment. If a loan goes into default, it takes over the loan and repays the outstanding capital to the lenders. It’s no guarantee for the future, but it is reassuring and a remarkable track record.
It’s not just people like me who’ve lent money to RateSetter. In 2015, Neil Woodford, the highly regarded fund manager who famously stopped investing in banks, led a £20 million funding round into RateSetter.
Whilst there’s no doubt the returns from RateSetter are attractive, it’s not the same as investing in banks and building societies, where your money is protected up to £85,000 per institution. With RateSetter, there’s no such protection.
As a result, you shouldn’t view RateSetter as an equivalent replacement to bank and building society deposit accounts. Lending money to individuals and businesses is not without risk. So if RateSetter’s underwriters get its analyses wrong, or if we have a major recession, defaults could rise and the Provision Fund may not be able to cope. However, it's fair to say there's a huge margin before you might lose even a small amount of your money.
As soon as you step away from bank and building society deposit accounts, you inevitably accept a degree of risk. But when you compare the interest rates on offer, and the £100 bonus, this is one step you should consider taking. I, for one, am glad I did.
I urge you to do the same. Not just to earn a handsome return on your cash. But because it'll show you the potential of peer-to-peer lending, illustrating why so many people are diversifying some of their SIPP and SSAS money in this way.
The RateSetter numbers quoted above are correct at 21 October 2017 (article originally published on 13 March 2016).
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AJ Bell Is Often The Best Value SIPP For Stockmarket Assets
Over time, charges can wipe out a huge part of your fund. We like AJ Bell because there are no set-up costs. If you hold passive funds, which is our preference, or shares, investment trusts, EFTs, gilts or bonds, you pay one small fixed fee no matter how large your fund. And when you come to draw your benefits either as occasional drawdown or UFPLS payments, there's a small charge for the whole year no matter how many times you access your money (many SIPP and SSAS providers charge more than this for each payment). However, you should always compare charges in detail, because AJ Bell could be more expensive than other providers, depending on the type of stockmarket assets you hold.
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As SIPPclub neither advises on, nor arranges, nor recommends specific investments or strategies, we're unable to say whether a SIPP or SSAS or any investment within it is right for you. Ultimately, it’s your money and your decision, and you should only proceed once you're satisfied you've undertaken sufficient due diligence. If you need advice, you should speak to your trusted adviser, or you could find a local adviser from Unbiased.co.uk. Alternatively, we'd be pleased to introduce to a suitably qualified independent financial adviser.
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