Our team is full-speed ahead in developing ways for existing investors to move their money into an ISA with us, and I wanted to give you a preview of what’s coming up.
We’ve got some new features in the works that we’re really excited about:
1) A one-off option for customers with over £1,000 in Classic or Access to move that money into an ISA, keeping your Safeguard coverage intact and without paying fees.
2) A way to automatically direct repayments from your regular lending into an ISA.
3) We’ll start registering interest for ISA transfers-in later this year.
All of these will offer our customers more flexibility in how they can access our Innovative Finance ISA product.
Building our new capabilities
We’ve been working on these behind-the-scenes: it’s a complicated job, and we’re determined to get it right, which is why we’re being extra careful as we build these new features.
In particular there are two areas we want to be really confident in before we launch.
Moving Safeguarded loans into an ISA
As you probably know, the rules around ISAs mean you have to fund them with cash. In practice, for Zopa this means that we can’t just move your existing Zopa investments directly into an ISA – you have to sell your loans and invest in new ones that are in an ISA-wrapped product.
Many customers have already been doing this to fund an ISA, by using our usual loan sale process and buying non-Safeguarded loans into their ISA. But we wanted to create a one-off way for customers to keep Safeguarded loans in an ISA wrapper, and not pay a fee to do so.
This is a challenge because of the nature of Zopa’s product. The rate of return you receive from your Zopa investments is a blend of the interest rates of the different loans you invest in, minus bad debt and fees. And of course things like loans’ interest rates vary over time, so everyone’s investment is individual.
So we’re focussing on make sure that the ISA projected return people have at the end of this process looks as close to the one they had before as possible. We believe that’s the fair thing to do.
Keeping the platform running smoothly
The second area is a bit more straightforward: we want to make sure that our platform is ready for the increased demand we expect to see when we launch our new ISA features. Back in the summer, a few of our processes began to run slowly, partly because there was so much demand for ISAs. We’ve already done a lot of development work to make sure we can process increased activity, and we’re just doing the final checks to make sure we’re ready for our new ISA features.
When we’ll launch our new features
Today we’ve been testing our new functionality with some of our investors (email firstname.lastname@example.org if you’d be interested in coming in to help us develop our products) and we’re nearly ready!
We expect you to be able to register your interest to move your Access and Classic money into an ISA very soon. We’re putting the final touches to the process and will be in touch with customers next fortnight.
The feature allowing you to automatically redirect repayments into an ISA is a little further down the line, but we should have that ready by the end of the year. We also hope to get to transfers-in later this year.
We’ll keep you updated.