Catastrophe In P2P Pensions
The operators dealing with P2P lending in the Evolution SIPP, which is possibly the best pension for P2P lending, have just announced that they will not allow new P2P lending.
In addition, other pension providers offering P2P lending might reduce or remove their services for non-advised P2P lending.
The Evolution SIPP
The Evolution SIPP is run by SIPPclub which is not a pensions operator itself.
Instead, it uses the Evolution SIPP name to collate together a variety of different investments that can be put into a pension, with one or more pension operators running the actual pension plans and various investments in the background.
The key operator for P2P lending within the Evolution SIPP has been Greyfriars. Greyfriars has said that it plans to stop allowing new P2P lending from 1 January 2017, due to the time it takes for it to administer P2P lending.
It seems that it has no automated processes for trading loan parts and the growth in popularity of P2P lending has increased the burden on the pension operator too far.
This is potentially a big blow, since the Evolution SIPP has offered the largest range of P2P lending options. (List at the end of this article.) SIPPclub director Brian Bennis has told us that they are in talks with back-up operators, so let's hope it finds a replacement soon.
The Evolution SIPP is available to high-net worth individuals only. P2P pensions are invariably suitable for people with a lot of money. See our comprehensive P2P Pensions Guide for more. You might also be interested in How Is P2P Lending Is Taxed?
Pension providers might allow P2P only to people who get advice
The regulator recently sent an update encompassing pension providers and financial advisers. As a result, pension operators that offer P2P lending and a wide variety of other non-typical investments are seriously mulling over covering their backs by accepting applications through financial advisers only. This is an over reaction to the regulator's announcement, which was only meant to stop businesses that were not acting responsibly.
Hopefully, not all the choice of P2P pensions disappears for those of us who like to advise ourselves. I'll keep you posted.
Opportunities that are/were available in the Evolution SIPP
Ablrate, business loans (especially against aircraft).
Abundance, business (renewable energy projects).
Assetz Capital*, business and property.
FundingKnight, business and property.
HNW Lending*, short-term property and high-value pawnbroking.
RateSetter, mostly personal loans but some business and property.
rebuildingsociety*, business and property.
Saving Stream, property.
ThinCats, business and property.
UK Bond Network, business.