Commenting on the news that Metro Bank is partnering with Zopa to lend its funds on the peer-to-peer platform, David Mann, Head of Money at Uswitch.com, says: “This could be a win win – Metro Bank could benefit from the traditionally high returns peer-to-peer lending can offer and there will be more cash in the pot for borrowers. For those locked out of loans from the traditional ‘Big Four’ banks, peer-to-peer lending can offer a much needed alternative, preventing them from resorting to payday loans.
“Seeing a challenger bank invest may also allay some of the fears people have and be a green light for anyone looking to boost their savings by investing their money into peer-to-peer lending. For despondent savers allowing their money to languish in low earning savings accounts and ISAs, a return of up to 5% with these schemes could be an attractive proposition.
“Would be investors have historically been cautious of using a peer-to-peer lender, in part due to a lack of FCA regulation. Although they are now regulated by the FCA, as with all investments your capital is not protected by the FSCS and is at risk. Other saving opportunities, such as current accounts, still offer some attractive interest rates, and may prove to be the last obstacle before peer-to-peer can truly hit the mainstream.”
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Uswitch is the UK’s top comparison website for home services switching. Launched in September 2000, we help consumers save money on their gas, electricity, broadband, mobile, TV, and financial services products and get more of what matters to them. Last year we saved consumers over £373 million on their energy bills alone.
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