Zopa, the online marketplace through which UK consumers can meet to lend and borrow money, has revealed that, in the near future, those saving for retirement will be able to lend at Zopa through a self-invested personal pension, and receive full pension tax breaks on this new asset class.
According to Zopa, the new asset class for self-invested personal pension (SIPP) customers will yield average returns of 6.75% and up to 14% per year, after fees and any bad debt, but before any tax payable. Zopa commented that this was an effective way to build up a retirement fund, as the rates are good but the risk is low.
The company added that the new class would be particularly attractive to consumers aged over 55 who want to draw down their pension assets to provide an income and need good returns from a low-risk asset.
Zopa has revealed that it is in the later stages of agreeing operational details with a number of specialist SIPP providers that are eager to accept Zopa lending as a new asset class within their offering. The company added that it believes its recent decision to work with independent financial advisers to promote consumer awareness of Zopa lending for their clients would help take-up through the SIPP route.
James Alexander, co-founder and CEO of Zopa, said: Given the increasing enthusiasm consumers are showing for access to the alternative assets that can now be sheltered within a SIPP and gain full pensions tax relief, this development is extremely significant.