Andy Haldane, director of financial stability at the Bank of England, reckons that peer-to-peer websites – which link those who want to borrow with individuals who want a return on their cash – are becoming increasingly economically important.
Last week one of the biggest peer-to-peer sites, Zopa, announced a safety net for lenders (or savers) who, it said, will be protected by a new fund that will pay out when borrowers default.
At the same time, Assetz launched the first peer-to-peer service for buy-to-let investors abroad, giving income-hungry savers another market to tap into. It joins a plethora of new specialist peer-to-peer businesses including GraduRates (for graduate loans) and CurrencyFair (for sending money abroad).
The peer-to-peer industry is not under the control of the financial regulators, does not attract the tax advantages of saving in an Isa or Sipp and carries the risk that you could lose all or some of your money.