Incidentally, I hate the ‘R’ word – I like to think of so called retirement as simply a choice to quit full time employment in order to be free to do what I want. The word Retirement has that retro feel of carpet slippers, cocoa and an engraved clock from the last employer on the mantelpiece!
Stock Market vs Peer to Peer?
My wife and I have ended up with a survivable pension income together with two other pension pots transferred into a SIPP invested in various funds. I also took the maximum tax free payments (25%) from the other pensions, some of which I have invested in the stock market and the rest in Peer to Peer Lending. Currently 70% of my cash is in Funds linked to the stock market and 30% in PtPL.
Based on how both have performed so far, I hope to increase the PtPL share to at least 50% in the next 12 months. With Peer to Peer, there is a steady stream of interest while the value of stock market funds flap around like a line of washing in a hurricane!
Testing the Water
I began with ZOPA, Ratesetter and Funding Circle and put small amounts in each in order to test the water. Interest was relatively low with Zopa so I stopped investing at £3k and am continuing to withdraw returned capital and interest. I put a significant amount in Ratesetter and Funding circle and these two platforms are still where the majority of my PtP cash is invested (80%) with the other 20% in Asset based platforms.
I’m continuing to switch returned cash from Ratesetter (current interest 6%) and Funding Circle (interest currently 8.3%) into other, higher paying platforms but I’m cautious about doing this too quickly as most of these platforms are relatively new and untried.
My first port of call, for higher interest rates was Assetz Capital. Here, I built up my investment to around £3k with an average interest rate of 11%. I will share more about Assetz in my next post.
Peer to Peer Independent Forum
Finally, I’d like to finish with a plug for the Peer to Peer Independent Forum. While not a beginner’s guide, this is a great place to gather opinions from both UK Lenders and those who actually work for, or own, the individual UK based platforms. Some of the discussions are quite technical but the forum will give you an honest feel for how fellow ‘prenders’ rate the different platforms.