What is a peer-to-peer ISA?

A peer-to-peer (P2P) ISA is also known as an Innovative Finance ISA (IFISA)

Introduced by the UK government in April 2016, the P2P ISA was launched to further support and develop the UKs growing alternative finance market.

Read more:download the IFISA guide

The P2P ISA allows investors to hold P2P loans and debt-based securities under the ISA tax wrapper, which means there’s no income or capital gains tax to pay. 


To be eligible to open a P2P ISA, investors must;

  • be 18 years old or over
  • be a UK resident, or be performing duties as a Crown employee serving overseas and paid out of the public revenue of the United Kingdom, or be married to - or in a civil partnership with - such a person
  • not have subscribed to another ISA of the same type in the same tax year
  • not have exceeded the annual P2P ISA subscription limit

Similarly to the Cash ISA and Stocks and Shares ISA, the P2P ISA is subject to the annual ISA allowance - which is £20,000 in the 2020/21 tax year. 

Here is an overview of the main features of a P2P ISA;

Annual subscription limit
£20,000 (2020/21)
Underlying assets
Peer-to-peer loans

Debt-based securities
Risk profile
Estimated returns
4–8% (targeted)
Key benefits
Potential for greater returns than a Cash ISA, with less volatility than a Stocks and Shares ISA

Asset-backed options can offer additional security

Clear choice over what you invest into



CARLTON Bonds are an IFISA provider specialising in fixed term property bonds.

Against a backdrop of low interest rates and a volatile stock market, the IFISA can provide an attractive investment opportunity for experienced investors. 

With the ability to hold peer-to-peer loans and debt-based securities, IFISA investments have the potential to generate higher rates of return than more traditional investment routes for investors with a greater appetite for risk.

To find out more, download our free IFISA guide.

The Innovative Finance ISA Guide