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Lend money to strangers to make money yourself?
The internet-based service ZOPA is a web-based service offering to match lenders to borrowers; effectively a peer-to-peer system that circumvents the banks' traditional wide margin in the middle. Lenders deposit money into the system, whilst borrowers are credit checked and risk assessed by the usual credit rating agencies.
Importantly, each loan is spread across a pool of lenders to lower the impact of an individual defaulting. The scheme appears to have been a success, - the site has grown to 328,000 members. The average lender offers £1,692 whilst the average borrower seeks £4,801, with car loans and debt consolidation stated as the most popular uses for the funds. Since launch, Zopa UK has lent over £70m
Whilst Zopa is regulated by the Office of Fair Trading and is a member of the Finance and Leasing Association and anti-fraud association, CIFAS, it does not fall under the remit of the Financial Services Authority (FSA), so your money will not be protected by the compensation scheme should things go wrong.
On balance, ZOPA is still fairly new, so don’t bet the farm on it; maybe just a field or two for now. However, the banks had better watch out. If peer-to-peer financial services really take off, services like ZOPA may do to banking what low-cost airlines have done to travel agents
saving for children
NEWSFLASH: 24.5.10; Government Announcement on Child Trust Funds
Since 1st September 2002, the government has given the parents of each newborn child in the UK a £250 Child Trust Fund voucher which can only be used to open and kick-start a Child Trust Fund account.
You’ll receive the voucher by post soon after you register for Child Benefit. (You can register for Child Benefit here.)
Top-up the fund
You, your family and friends can top-up the account by up to £1,200 a year in total.
Access from 18
Only your child will have access to the fund, and only when they reach 18.
Government contributions
The government will make an additional contribution to your child's CTF at seven years old.
Tax Free
All investment growth and the payout at 18 are free from personal taxes
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easy access best buy
Rate: 3.0% variable, including bonus of 2.5% for 12 months
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please select your
Fixed Term Deposit Options
1 year 2 years 3 years 5 years
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1 year fixed term deposit
3.15% Santander 1 year Bond
Rate: 3.15 % fixed AER
Early closure and withdrawals are not permitted
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15 month fixed term deposit
Santander 15 month Fixed Rate Savings Bond
3.0%
Rate: 3.0% fixed AER until February 2012
Min. Deposit: £25,000 Max Deposit: £2,000,000
Early closure is not permitted
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2 year fixed term deposit
3.8% 2 Year Bond
Rate: 3.85% fixed AER for 2 years
Min. Deposit: £500 Max Deposit: £1,000,000
Early closure and withdrawals are not permitted
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3 year fixed term deposit
4.05% Post Office 3 Year Bond
Rate: 4.05% fixed AER
Min. Deposit: £5000 Max. Deposit: £500,000
Early closure and withdrawals are not permitted
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5 year fixed term deposit
5.0% 5 Year Fixed Rate Bond
Rate: 5.0% fixed AER for 5 years
Min. Deposit: £1 Max Deposit: £5,000,000
Early closure or withdrawals will result in penalties.
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(Cash ISA) Individual Savings Accounts
3.10% Nationwide eISA
Rate: 3.1% AER (variable) Min. Deposit & Account Balance £1
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Current Account
Santander Preferred Current Account
Rate: 5% AER (fixed for one year) on balances up to £2,500.
After one year, 1% AER (variable) applies. Balances over £2,500 earn 0.10% AER (variable)
Min. Deposit: £500 per month
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Fixed Term Deposit Option
1 year 15 months 2 years 3 years 5 years
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Extra ‘Small’ Print
Persons depositing cash in savings accounts should also be mindful of these additional factors:
The Financial Services Compensation Scheme (FSCS) £80,000 guarantee limit applies to your total holdings with any institution covered by the same banking license:
If a saver was lucky enough to have savings of £80,000 with each of : Aviva, The AA, Bank of Scotland, Birmingham Midshires, Halifax, Intelligent Finance, Saga and Solutions (total deposit holdings of £640,000) the total compensation would only be £80,000. Even worse is that if you had a £20,000 mortgage with the Halifax, this could be deducted from your £80,000 compensation!
If in doubt check with your independent Chartered Financial Planner
In compiling the accounts shown on www.lovesaving.info, pragmatic consideration has been given to a number of factors:
In April 2009, one of the worlds leading credit agencies; Fitch downgraded a substantial number of UK building societies.
Some institutions are notorious for advertising ‘headline’ rates, which disappear shortly after you deposit.
A number of foreign owned banks operating in the UK DO NOT benefit from the protection offered by the Financial Services Compensation Scheme (FSFC) and in many cases (as recently demonstrated by the belligerent Icelandic government) there is doubt about the robustness of their domestic compensation schemes
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