You can now set your repayments so they automatically move into an ISA. This means that you can gradually move your Zopa money into an ISA without having to sell loans and pay fees associated with that process.
Changing your repayment settings is quick and simple.
How to change your settings
First, you’ll need to open an ISA with us (if you haven’t done so already).
Changing your repayment settings
- Log into your Zopa account
- On your investment Summary page, find and click the “Change repayments” button just above our holding account
- On the next page, select “Move to ISA”, then click “Next”
- Then, select where you want your money to go if you reach your annual allowance or the tax year ends (you can change this later if your want).
- You’re all set!
If you have any questions, our Customer Services team are on hand to answer them.
How reinvesting repayments will affect your ISA allowance
Moving your repayments from your non-ISA products into an ISA like this will contribute to your annual allowance. This is because you’re moving money into your ISA from another account – what’s called ‘new money’ in the world of ISAs. It’s the equivalent of setting up a standing order from a current account into an ISA from the same bank.
Once your money is in the ISA and has been lent out, those repayments won’t contribute to your ISA allowance. This is because you’re effectively recycling the money that you’ve already contributed into your ISA. And of course, any interest you earn will be tax-free.
More about your ISA allowance
Your ISA allowance for this tax year (2017/18) is £20,000. This can be put into one ISA, or spread across different types of ISA, but can’t be exceeded during this tax year.
Remember: we can only see how much you have in your Zopa ISA. If you have any other ISAs, check these things before changing your repayment settings:
- How much of your ISA allowance do you have left?
- Will any standing orders you already have take you to your annual limit?
HMRC’s guidance is really helpful if you’re unsure of what you can do.
Reaching your year’s ISA allowance
Don’t worry: you won’t have to monitor your repayments and turn them off at the right moment. We built in a tool that will automatically stop your repayments going into your ISA when the tax year ends or, if your only ISA is with Zopa, you reach your annual limit. For example:
You have £19,985 in your ISA, but your next repayment is £25. Our system recognises that you’re approaching your limit, and splits that repayment into £15 and £10. £15 goes into your ISA, and the rest goes back into your Zopa investment product or your Holding account, depending on your preferences.