Seven in 10 (71%) Moneywise.co.uk users would consider using peer-to-peer (P2P) lending in a bid to earn higher returns on savings, our latest poll results reveal.
This is split between nearly four in ten people (39%) who already use it, and over three in ten people (32%) who would consider using it in future.
Interestingly, our poll, which received 890 votes between 9 and 16 August, also reveals that more people have gotten into P2P lending over the last six months.
When we asked the same question in late February 2016, of the 892 who voted then, a smaller 33% said they already use P2P lending, while 38% said they’d consider doing so in future.
An increasing number of people have also now heard of P2P – with 9% not having heard of it in February, compared to just 6% now.
However, conversely the number of people who wouldn’t use P2P has risen from 21% in February to 23% in August – perhaps highlighting a greater awareness of the risks involved.
P2P lending websites match savers with borrowers. The savers then effectively loan their money to borrowers, earning interest on top.
The main attraction is that P2P lending typically offers much higher interest rates than traditional savings accounts.
However, unlike cash savings, which are generally protected up to £75,000 per financial institution by the Financial Services Compensation Scheme (FSCS), P2P investments aren’t protected if something goes wrong - unless you were mis-sold by an adviser and the sale meets a number of other criteria (see fscs.org.uk for more on this).
Look out for our peer-to-peer feature next week, which looks at the risks and rewards, as well as analyses the key players in the industry.
The pie charts below highlight the key differences between savers’ views on P2P lending in February compared to now.