PensionsNov 20 2015

P2P platform moves past £1m in Sipp investments

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P2P platform moves past £1m in Sipp investments

More than £1m has been invested by self-invested personal pension holders through peer-to-peer lending platform RateSetter.

Launched in April, the firms’ pensions offering allowed individuals to invest directly rather than via advisers.

RateSetter has now built partnerships with several trustees, including Greyfriars, Westerby, London and Colonial and European Pensions Management, and is in discussions to bring more trustees on board over the coming months.

Ceri Williams, senior commercial manager at RateSetter, said that people at, or approaching pension age, make up a large proportion of their investor base, so even before launch they knew there would be significant appetite.

“It took us three months to get to £250,000 under administration, but we’re now growing at an exponential rate.

“It’s also important to recognise the role of our forward-thinking trustee partners, who are promoting innovation in what is traditionally quite a restricted sector,” he added.

At the start of the year, FTAdviser revealed that the firm was “very close” to a deal with two providers, with more being brought on board in time for April’s at-retirement reforms.

At the time, London and Colonial’s head of product Adam Wrench said that changes to the pension landscape and the new flexibility being afforded to Sipps and drawdown contracts meant the hunt for high yielding income returns to back drawdown arrangements is on.

“We see P2P lending as playing an ever increasing role as the pension market moves away from traditional conventional annuity options.”

However, since then other Sipp providers have warned of the dangers of including P2P lending products within their wrappers, responding to initial distribution deals being signed in recent months.

Mr Williams admitted that so far IFAs have struggled with the new products, partly due to paranoia around their liability in recommending P2P, especially given some have had their fingers burned by the Financial Ombudsman Service in the past.

“Advisers are not used to buying products like this, they’re happier dealing with closed ended funds and accessing things on platforms these days,” he commented.

peter.walker@ft.com