Join other 4thWay HNW investors: harness your combined power for an even better deal

Same loans, higher rates, more loans, risk guarantees. Join now for free!

P2P Lending Beats The Stock Market, Again, In 2022

By Matthew Howard on 2nd January, 2023 | Read more by this author

In 2022, if you invested in one of the cheapest and best share funds to cover the entire UK stock market, through Vanguard, you'll probably roughly have broken even when taking into account the fund costs, as well as the cost of your share-dealing account, pension or share ISA.

That's even if you include the £80 billion in cash that the UK's largest companies paid directly to shareholders.

It could have been worse. Since P2P lending started in 2005, UK stock-market investors have typically lost money after costs in 1/3 of those 18 years!

Now, the stock market is proven to be a truly excellent place to invest if you have very long investing horizons, a sensible strategy and strong nerves during crashes.

But, with each passing year, more investors and financial advisors are cottoning on to diversifying into stable P2P lending:

18 years of P2P has brought 18 consecutive, resoundingly positive years for people lending their money. And that's even through the Great Recession and property crash of 2008 and through the 1-in-300-year pandemic recession.

Overall returns comparable or better in P2P lending

If you had invested in 2005 in both shares and in P2P lending, after costs and any losses, you'd probably have made more money in P2P. You'd have made in the region of 5%-7% per year.

In shares, after costs, you'd probably have made something like 4%-5.5% per annum.

So that means an initial stock-market pot of £1,000 would be roughly up to £2,500 by now, while it would be up to £3,500 on your initial P2P lending.

What's more, that was earned more stably, with positive returns every year.

It goes to show that it's long past the point where investors should see a big place for P2P lending in their investing portfolios.

Read more

Peer-to-Peer Lending Vs Other Investments.

Readers’ Q: Do I Need To Invest In Shares If I Do P2P Lending?

The Right Split Between Savings, P2P, Shares, Property.

Look Outside P2P Lending: Investing In Shares.

Independent opinion: 4thWay will help you to identify your options and narrow down your choices. We suggest what you could do, but we won't tell you what to do or where to lend; the decision is yours. We are responsible for the accuracy and quality of the information we provide, but not for any decision you make based on it. The material is for general information and education purposes only.

We are not financial, legal or tax advisors, which means that we don't offer advice or recommendations based on your circumstances and goals.

The opinions expressed are those of the author(s) and not held by 4thWay. 4thWay is not regulated by ESMA or the FCA. All the specialists and researchers who conduct research and write articles for 4thWay are subject to 4thWay's Editorial Code of Practice. For more, please see 4thWay's terms and conditions.

Sources: Vanguard;; Morningstar

Copyright BFGSL Ltd and 4thWay® 2014-2023. This peer-to-peer lending/IFISA comparison and ratings website is based on high-quality research, which requires investment. Please share content from our website by linking to it and not by copying it. See our T&Cs and Copyright Policy for more details and to buy additional rights. Acknowledge your sources.