Spoke in support of the Investment Savings Account offering innovative finance solutions

In the realm of Individual Savings Accounts (ISAs), the Innovative Finance ISA (IFISA) often finds itself in the shadows, overshadowed by the more popular cash and stocks & shares ISAs. This lack of visibility, despite the benefits it offers, can be attributed to the dominance of traditional ISA types in public and media discussions.

The IFISA, however, plays a crucial role in supporting UK small businesses, fostering regional job creation, and contributing to long-term economic value by channeling private capital into private rather than publicly listed companies.

Folk2Folk, a key player in the Peer-to-Peer (P2P) sector for over 13 years, is not calling for IFISA reform but is advocating for its recognition and better understanding. The stakes are high for investors, UK businesses, and the wider economy regarding the future of the IFISA.

The IFISA offers tax-free, fixed monthly income with capital secured against property. It provides a more tangible connection to where the investor's money is going, giving them more investment choices and allowing for diversification of their portfolio.

The ISA system is currently under speculation, with rumors of a potential cap on cash ISAs. In this context, the importance of the IFISA becomes even more evident. It offers a viable alternative for investors seeking tax-free returns and a more direct impact on the UK economy.

An open letter was sent to Chancellor Rachel Reeves in March, signed by the Chair of a certain organization, urging the government to ensure the IFISA is not overlooked. So far, there has been no response.

It's time for the IFISA to be acknowledged, included, and championed. The FSCS only applies if the institution fails, and no ISA, including the IFISA, is protected against investment loss. However, the potential benefits and the role it plays in supporting British businesses make it a worthwhile consideration for investors.

In the case of Folk2Folk, the IFISA applies to business loans that are secured against UK land and property, with conservative loan-to-value ratios and thorough due diligence. They also have an independent wind-down provider on retainer to continue management of the loan book in case of ceasing operations.

Calls for structural simplification and a renewed focus on equities in the ISA system have been made. However, the IFISA's unique role in supporting small businesses and fostering regional growth should not be overlooked.

As the debate around the future of ISAs continues, let's not forget the IFISA and its potential to drive economic growth and job creation in the UK. It's time for the IFISA to take centre stage in our national conversations.