Today I have a sponsored guest post for you on behalf of Top Subscription Boxes. On their website they advertise a huge range of subscription box services.
With these services, you receive a new and exciting product (or selection of products) every month. You can subscribe for as long or as short as you want (subject to minimum subscriptions). And as you will see, there is something to suit every taste and budget!
Whether you want to send someone special a gift they will really enjoy or just treat yourself (you deserve it!), the subscription box services listed below could provide the perfect solution. We tried all of these ourselves before bringing the very best together in one place.
So without further ado, let’s get started!
Glossybox
Whenever it comes to beauty and make-up subscription boxes. Glossybox always takes the top spot. Glossybox allows you to treat yourself with a perfect combination of deluxe and full-sized beauty product samples from top brands.
Each month they send you a great-value box loaded with the latest make-up products, tools and beauty creams – and it will only cost you £13.25 per month.
In their previous boxes they have featured well-known brands like La Mer, Nars, pedigree French brands such as La Roche Posay, and impressive budget make-up from the likes of Rimmel.
Beer Bods
Beer Bods is known as the UK’s #1 craft beer subscription service. They send you a box of 8 beers every two months. So basically you receive one beer a week, along with the story behind that beer. All subscribers receive the same beer at one time, and you can join in a live online tasting every Thursday at 9 pm. So you can enjoy a new beer with new friends every week and compare notes with them. The bi-monthly subscription will cost you £24.
Arena Flowers
Nothing can be better than seeing fresh flowers in the morning. They make you feel calm and give your day the perfect start.
Arena Flowers is a leading ethical floristry service. They deliver exciting bouquets through their monthly subscription service.
They’ve been sending out their beautiful bouquets for the last 14 years and have achieved the milestone of 10 million deliveries. Every bouquet you receive is hand-tied and arranged by one of their expert florists to create a unique bouquet just for you. You can subscribe by paying just £17 a week.
Gadget Discovery Club
The Gadget Discovery Club allows you to treat yourself or your loved ones by sending them subscription boxes containing 4 innovative gadgets they didn’t know they needed!
They say that every gadget they’ll deliver to your doorstep will help you to upgrade your home, entertainment or lifestyle. The subscription box contains everything from tech wearables to smart home devices, including Samsung/Philips kits and Google home speakers.
You just need to sign up and select your preferences so they can send you the latest exciting gadgets based on your profile. They offer a monthly subscription or you can also choose a yearly plan. The monthly option will cost you £33 per month.
BakedIn Baking Club
The BakedIn Baking Club is a baking subscription service that delivers a different recipe each month straight to your door. Once you’ve subscribed to this service, you will receive a beautiful baking box with a step-by-step recipe guide, along with all the dry ingredients you need and some extras too.
BakedIn allows you to make your favourite muffins, biscuits, cakes and cookies, to share with your family and friends. If you are one of those people who loves baking, then this is the subscription box service for you. The price is £7.50 a month.
Good luck, and we hope you find the perfect subscription box service for you or your loved ones!
Thank you to my friends at Top Subscription Boxes for some eye-opening suggestions. I would definitely like to try some of these services myself! They would also, of course, make excellent Christmas or birthday presents. Please do click through to their website and check out the other subscription box services as well!
As always, if you have any comments or questions, please do post them below.
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Christmas is barely six weeks away, and it’s a safe bet more of us than ever will be shopping online this year.
Pounds and Sense is aimed at the over-50s, so today I thought I’d set out a selection of products you can buy online suitable for people in this age category. Though in my view most would be very well received by younger people too 🙂
Quite a few of these are things I’ve received for free this year as an Amazon Vine reviewer. Others are simply products that I’ve bought for myself – or friends or relatives – and am very happy to recommend to others.
Please note that I am using some affiliate links in this article, so if you click through and make a purchase, I may receive a commission for introducing you. Of course, this will not affect the price you pay or the product you receive.
(1) Music Hat
My first thought when I received this unisex beanie hat to review for Amazon Vine was that it was just a novelty product – but it turned out to be a lot better than I anticipated!
The hat itself is made of stretchable acrylic and is warm and comfortable. It’s available in a range of colours to suit all tastes. And in addition to keeping your head warm in the winter, it boasts an LED light at the front and built-in Bluetooth earphones.
The LED light has three brightness settings, with the brightest illuminating the area in front of you quite impressively. I’ve found this useful for putting the bins out at night and (on a lower setting) to ensure I can be seen when walking at night along poorly lit roads and pavements.
The stereo headphones are surprisingly good quality. Obviously you wouldn’t expect super high fidelity, but for listening to music or podcasts on the go, they are more than adequate. Setting up a Bluetooth connection with my Android smartphone was easy, and I’ve been enjoying listening to my choice of music on my daily walks. In theory you can also use the hat for making and receiving phone calls, though I haven’t tried that myself. Even if you only use it for listening to music, though, it’s still a very nice piece of kit. And for around £20 at the time of writing, this unisex beanie hat won’t break the bank either!
I also got this two-light beanie hat (without built-in earphones) for my sister Annie. At this time of year she has to walk home in the dark from her job at a prison, and she goes running in the evening sometimes as well. Annie sent me the following mini-review: ‘That fluorescent hat is actually really good! Very bright front and back light. Great for being seen by others so makes you feel safe at dusk (I don’t run in the dark nowadays so much). Nice snug fit especially round the ears and easy to put the lights on (front and back) even when it’s on your head! Have had lots of positive comments. Definitely recommended!’
(2) Fruit Wines
I am not much of a drinker these days, but I will always make an exception for these delicious fruit wines, especially at Christmas!
Clive’s Wines is a small, family-run company based barely a mile from where I live. They offer a range of high-quality fruit wines, including damson, cherry, raspberry, strawberry, elderflower, plum and (my personal favourite) gooseberry. For special occasions they also offer a premium sparkling ‘Rhubling’ made with rhubarb.
You can order individual bottles and gift packs online for delivery anywhere in the mainland UK and Europe, with free delivery for orders of over £60 in the UK. If you are looking for an unusual gift that will also support a small local business, I can promise that you (and the lucky recipient) won’t be disappointed 🙂
You do, of course, have to be over 18 to order any product containing alcohol.
(3) Hand Warmer and Power Bank
I have two of these devices now (the first came my way as an Amazon Vine reviewer). As you may gather, they are dual-purpose devices, serving both as a hand-warmer and a power bank for charging your phone or tablet.
The product pictured above is the OCOOPA Rechargeable Handwarmer and Power Bank. This has a powerful 10,000 mAh battery and doesn’t therefore need frequent recharging. You can have three levels of heat (though I find the lowest is more than sufficient for me). It only takes a few hours to charge fully and can charge up my Android phone in under an hour.
Currently I am using this device more as a power bank than as a hand warmer, but that may change if and when sub-zero winter weather conditions arrive. For under £30. it would make a nice, practical gift for any older person (especially if they suffer from cold hands!).
(4) Amazon Echo
Unless you’ve been on Mars for the last few years, I’m sure you’ve heard of these devices. There is a growing family now. The picture above is of an Echo Show, which also has a visual display. I have one of these in my kitchen and use it all the time. I also have an Echo Dot in the bedroom, a standard Echo in the living room, and a tiny Echo Flex in my office. And I’m still thinking of getting more!
I use my Echo devices primarily for listening to music and radio. But I also regularly use them for checking the weather forecast, getting news updates (‘Alexa, read my flash briefing’), asking random questions (‘Alexa, how far is the Earth from the Moon?’), checking the time, setting alarms and timers, finding out what’s on TV, and much more. Alexa has become part of my life now, and I have to admit I actually miss her when I am away. How sad is that? 😀
In my view an Amazon Echo device would make a great gift for any older person, even if they aren’t at all tech-savvy (though they do of course need wifi to work). Once the device has been set up – which is easy enough – you can control it entirely using your voice, just using the ‘wake word’ (Alexa by default, though you can change it if you like) to activate it.
For an older person living alone especially, having an Amazon Echo device can provide companionship as well as reassurance in the event of an emergency (you can ask Alexa to call any of your contacts for you, though currently you can’t get it to phone 999). And an Echo is a present that will go on giving through Christmas and well beyond. Highly recommended.
Amazon often have some great offers on Echo/Alexa devices in their Black Friday sale.
(5) Christmas Hampers
This is quite a traditional Christmas gift, but none the worse for that. I have been sending Christmas hampers to various elderly relatives for many years, and they are always well received. The hampers include a selection of luxury food and drink that people on a limited budget wouldn’t typically buy for themselves. I often get quite in-depth feedback about what they liked or disliked about this year’s hamper and whether it was better or worse than last year’s!
There are various suppliers you can order hampers online from (Marks and Spencer have a good selection, for example). But these days I normally order from Amazon. They have a vast range from a variety of merchants, and you can easily search for the type of hamper you want (including by price, with/without alcohol, vegan/vegetarian, and so on).
Amazon also sell hampers aimed specifically at older people, such as the Traditional Treats Hamper (from Clearwater Hampers) pictured above. This costs £49 at the time of writing and includes luxury chocolates, a tin of afternoon tea, hand-baked lemon biscuits, rhubarb and custard sweets, almond biscuit thins, clotted cream fudge, and more. Guaranteed to put a smile on the face of any grandparent 😀
Of course, there are lots of other options as well, for younger folk as well as older ones. Prices range from around £20 to £200 or more if you really want to push the boat out!
(6) Red Letter Days Vouchers
Red Letter Days sell gift vouchers for a huge range of experience days, for single people or for couples.
Among other things, they include luxury spa days, hotel mini-breaks, afternoon tea (see picture above), driving experiences (e.g. supercar driving, go karting, truck driving), sky diving, hot air ballooning, river cruises, visits to historic houses/gardens, restaurant meals, and many more. Some will obviously appeal more to younger folk, but there are plenty that are equally suitable for all ages (and plenty of older people still enjoy a bit of thrill-seeking as well!).
In the last 18 months many of us have have spent months on end cooped up in our homes. So the chances are your friends or relatives will really appreciate the chance to enjoy an exciting (or relaxing) experience day such as these.
(7) Salter Electronic Scales
Finally, here’s a great, inexpensive gift for anyone who enjoys cooking.
No bowl is provided with these scales, but because of the way they work you don’t need one. You can place any container you like on the scales and press the button to zero the display (so the scales disregard the container’s weight). You can then add your ingredient and the weight (or liquid volume if you prefer) will be shown. If you want to add more ingredients, you can zero the display again before doing so. Once you get the hang of this, it’s amazingly quick and simple. I use it all the time now, and even weighed a parcel on it recently 😀 I also like the way it hardly takes up any space at all in my kitchen when stored on its side.
So there you are – seven great ideas for Christmas gifts you can buy online that any older person would be delighted to receive (and a lot more exciting than slippers or socks!). As always, if you have any comments or questions about this post, please do leave them below.
Note: this is a fully updated version of an annual post.
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Today I am sharing some information about personal finance podcasts. This is not a subject I previously knew very much about, so I am grateful to my friends at All Finance Tax for supplying the excellent infographic and some of the other info below.
What is a Podcast?
A podcast is like a series of radio programmes on a particular theme or topic, from politics to cycling. You can subscribe for free using a suitable app on your smartphone (or other internet-enabled device). You can then listen whenever and wherever you like, via headphones, earphones, through speakers, in the car, on the train, and so on.
Podcasts are a booming medium and one of the major trends of the last five years. There are now podcast shows on nearly every topic you can think of. And with the rise of both independent and conglomerate podcast production studios, it seems likely this new medium will be in our lives for many years to come.
In the same way people were once passionate about certain radio shows, podcasts have the same dedicated followings, thanks to hosts who become familiar audio friends. Some even run live events. As a medium, podcasts are incredibly accessible, with few barriers beyond an internet connection and a smartphone or other device that can stream audio. No matter where you are or what you’re doing, podcasts offer content that educates, inspires and entertains. If you have never listened to a podcast before, the BBC Sounds podcasts page is one good place to start.
How to Listen to a Podcast
The easiest way to find and listen to podcasts is by using an app on your smartphone.
If you have an iPhone, it will have a built-in app called Apple Podcasts. This works very well and allows you to search for and subscribe to any of a huge range of podcasts. All you have to do then is open the app any time you want to listen and choose the episode you require.
Android owners can use the free Google Podcasts app. You can download this from the Google Play Store if you don’t have it already. It is not as user-friendly as the Apple app and doesn’t have as many features, but will certainly get you started. There are also other free or inexpensive apps you can download from Google Play such as the highly-rated Pocket Casts or Castbox.FM.
Finance Podcasts
One genre with a surprisingly large, dedicated listenership is finance. While to some that might sound a dry, unpromising subject, the podcast medium has enabled content to be reinvented with an unexpected, creative approach.
With hosts ranging from seasoned finance professionals to novice FIRE (financial independence) enthusiasts, podcasts allow people who would never previously have been interested in finance – or perhaps even have been intimidated by the topic – to access valuable information presented in an engaging, inclusive way.
All Finance Tax rounds up the top finance podcasts in the infographic guide below. Find out about the must-listen shows, including podcasts about:
Entrepreneurship
Billionaire case studies
Female-led finance
Personal and couples’ finance
Start-ups
And more!
With snapshots of real reviews plus the best episodes to start with, this resource will help you find the right show for your personal interests and needs regardless of your outlook on finance. Read on for the full list of finance podcasts to start your listening journey!
Many thanks again to my friends at All Finance Tax for their help with this article. I have listed below all the podcasts recommended in the infographic, with links to their homepages (or another website) where you can find out more. You can also listen to the podcasts on the web via these pages, though using an app on your smartphone (as discussed earlier) may be more convenient generally.
One more I would add is the Ask Martin Lewis podcast from BBC Radio Five Live. Martin is, of course, a well-known personal finance guru (and founder of the hugely popular MoneySavingExpert website). Although I can take or leave his TV shows, his podcasts are less gimmicky and include valuable, accessible advice on all aspects of personal finance (not including investing).
As always, if you have any comments or questions about this post, please do leave them below. I’d also love to hear about any personal finance podcasts not mentioned above which you enjoy and recommend!
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Nobody would pretend life insurance is an exciting subject, but in these uncertain times it’s something we all need to think about at least. So in this post I thought I’d set out the basics regarding life insurance and why you might need it.
What Is Life Insurance?
Life insurance is a type of insurance policy that protects your loved ones financially if you die. It can help minimize the financial impact that your death could have on your family and provide peace of mind for you and them.
Most life insurance policies are designed to pay a cash sum to your loved ones if you die while covered by the policy. This can help them cope with everyday money worries such as mortgage payments, household bills and childcare costs. It may also cover funeral costs. You can take out life insurance under joint or single names, and you can pay your premiums monthly or annually.
There are two main types of life insurance: term life insurance and whole of life insurance.
Term life insurance policies run for a fixed period such as 10, 20 or 25 years. These types of policy only pay out if you die during the term of the policy. A whole-of-life insurance policy, on the other hand, pays out no matter when you die (as long as you keep up with your premium payments, of course).
There are three different types of term life insurance. With decreasing term insurance, the amount payable on death reduces over time. This type of policy is often taken out in conjunction with a mortgage as the payout reduces over time in line with the amount needed to clear the outstanding debt.
You can also get increasing term insurance, where the payout rises each year (typically to take account of inflation) and level term insurance, where it remains the same throughout. Not surprisingly, level term and (especially) increasing term policies are more expensive than decreasing term.
Over 50s Life Insurance
This type of whole-of-life insurance may be of particular interest to Pounds and Sense readers (PAS is particularly targeted at over 50s).
It allows you to leave a guaranteed fixed lump sum to your loved ones when you’re no longer around. To apply, you need to be aged 50 to 80 (85 in some cases) and a UK resident. No medical is normally required, and your monthly premium (which can be as low as £7) won’t change for as long as you live. In most cases cover for accidental death applies immediately, but for death from other causes there may be a waiting period (typically a year). This type of insurance is not normally index-linked, so over time the value of the lump sum payable may be eroded by inflation.
Who Needs Life Insurance?
Life insurance is intended to protect your dependants from getting into financial difficulties if you die. So if you’re single with no dependants and/or on a very low income, it may not be necessary or appropriate for you.
But if you have a partner, children or other relatives who depend on your income, you probably should have life insurance to help provide for them in the event of your death. Many people take out life insurance when they get married or start a family, or when taking on a major financial commitment such as a mortgage.
Most financial experts recommend you take out life insurance before you reach 35, as the sooner you get cover, the cheaper your premium.
What Doesn’t Life Insurance Cover?
Life insurance normally pays out only on death. If you become unable to work due to an accident or illness, you won’t generally be covered.
Some life insurance policies will pay out if you receive a terminal diagnosis. This is by no means always the case, though, so it’s important to check the wording of your policy carefully.
Most life insurance policies also have some exclusions, e.g. they might not pay out if you die from alcohol or drug abuse. In addition, if you take part in risky sports, you may have to pay a higher premium. If you have a serious health problem when you take out a policy, any cause of death related to that illness may be excluded.
For the above reasons, you may also want to consider taking out critical illness cover. This covers you if you get one of the medical conditions or injuries specified in the policy. Some examples of critical illnesses that might be covered include heart attack, stroke, cancer, and chronic, life-limiting conditions such as multiple sclerosis and MND. Most policies will also consider permanent disabilities as a result of injury or illness. These policies only pay out once and then the policy ends. Some policies will make a smaller payment for less severe conditions, or if one of your children contracts one of the specified conditions. Health conditions you knew you had before you took out the insurance won’t generally be covered.
What Does It Cost?
Life insurance can be surprisingly good value. Premiums start at just a few pounds a month. Prices vary a lot, however, so it’s important to shop around and take advice as appropriate.
A variety of factors may affect the price you are quoted. They include the following:
your age
your health
your weight
your occupation
your lifestyle
whether you smoke
your medical history
your family’s medical history
the length of the policy
the amount of money you want to cover
whether you want decreasing, level or increasing term cover
As mentioned above – and other things being equal – the younger you are, the cheaper your policy is likely to be. But as the list above indicates, many other factors can affect the price you are quoted. In addition, women are typically charged a little less than men, as on average they live a few years longer.
The Get Life Cover Option
As you can see, while life insurance is a simple concept, in practice there are many variations. It’s therefore important to establish what is the most appropriate choice for you and your family, and shop around to get the best price for this.
A company that can help with both these things is Get Life Cover. They will put you in touch with an independent financial adviser in your local area, not some anonymous call centre. The adviser will take the time to establish your exact requirements and recommend a bespoke policy tailored to your (and your family’s) needs. They will be able to arrange all types of life insurance, critical illness cover, cover for long-term illness or disability, and so on. Being independent they will also be able to select from the whole of the market. They are not tied to one insurance company, ensuring you get the best possible value for money.
If you wish, Get Life Cover’s independent advisers can also assist you with other financial matters, including investments, pensions, mortgages, tax, and so on.
To get an initial personalized quote, click through to the Get Life Cover website and provide a few basic details to get a quick quote in 30 seconds, without obligation. You can then discuss this with a local adviser to ensure you get exactly the right type and level of cover for your needs.
As always, if you have any comments or questions on this post, please do leave them below.
Disclosure: This is a sponsored post on behalf of Get Life Cover. If you click through one of the links and end up making a purchase, i will receive a commission for introducing you. This will not affect in any way the product or service you receive.
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I recently returned from a three-day break in Llanbedrog. This is a village on the Llyn (or Lleyn) Peninsula in NW Wales. It was the first time I had been to Llanbedrog, although I have holidayed in North Wales quite often.
This was also the first time I had stayed at an Airbnb property. I did try last year but was scuppered by the pandemic, so had a refund voucher I needed to use up. The place I stayed was a room/apartment attached to a private house, but self-contained with its own front door. I’ll say more about it below.
Llanbedrog itself is by the coast, roughly half way between Pwllheli (famed for its Butlins camp, now run by Haven Holidays) and trendy Abersoch. Here is a map of the area from Google Maps.
Accommodation
As mentioned, I stayed at an Airbnb property in Llanbedrog. Under Airbnb’s rules I’m not supposed to reveal exactly where it was, but the location was certainly convenient. It was about 100 yards from the main road and 150 from one of the two local pubs. The beach was around ten minutes’ walk away.
You can read more about the place I stayed on this page of the Airbnb website (you can also read my post about booking a holiday with Airbnb here). It consisted of a large bedroom-cum-sitting room, along with a bathroom with excellent walk-in shower. There was also a kitchenette area with a toaster, fridge, sink, coffee-making machine and so on, but no actual cooking facilities (there wouldn’t have been room for them). For a short stay that wasn’t a problem, though. On two nights my Airbnb host, Jem, kindly cooked main meals for me for a modest extra fee. And on the other night I went to the local pub, which was very good as well 🙂
My room had a stunning view across the hosts’ beautiful garden with the sea in the background (see photo below). Another thing I enjoyed was that the garden was home to a colony of wild rabbits. They looked very cute and provided an entertaining all-day cabaret!
The apartment had free wifi which worked perfectly during my stay (not always the case in my experience). The location was quiet and peaceful, and I slept very well.
Financials
As Pounds and Sense is primarily a money blog, I should say a few words about this.
I paid a total of £344.98 for my three-night stay. This was made up as follows:
£91.67 x 3 nights = £275
Cleaning fee £20
Service Fee (which goes to Airbnb) £49.98
I was charged an initial deposit of £112.50, with the balance taken from my card a fortnight before my visit. As mentioned, some of the cost was covered by a refund from a booking I made with Airbnb in 2020 which had to be cancelled.
So the total price worked out to £115 a day. Obviously that’s not cheap, but prices across the board have risen due to Covid and the additional cleaning and other precautions property owners have to take. I thought it was very reasonable bearing in mind the high standard of the accommodation and the convenience of the location.
Things to Do
I won’t give you a blow-by-blow account of what I did while I was there, but here are a few highlights.
Plas yn Rhiw
This National Trust property is about 7 miles from Llanbedrog. It’s pretty remote, and I was glad to have my satnav to guide me. At one point I drove through a tiny hamlet and some children waved at me as I passed. That was a first for me!
Plas yn Rhiw is a 16th century manor house (with Georgian additions) overlooking the sea. Unfortunately due to Covid only the ground floor was open to visitors. This was basically three rooms, all roped off so you had to look at them from a distance. As you may imagine, it didn’t take me very long to go round. I did though have a nice chat with the National Trust lady who was in the kitchen. She told me about the paraffin cooking range from the 1950s (see photo below). There must have been quite a smell in the house when this was going!
The house also has some beautiful formal gardens (see photo below). And, naturally, there is a tea room. I enjoyed an excellent cappuccino with a jam and cream scone here. As I chose to sit inside (it was raining a bit at this point) I had to complete a Covid tracking form. That was no great hardship, of course.
Overall I enjoyed my visit to Play yn Rhiw even though the restrictions were frustrating. I would like to go back there again when things are more normal and see the rest of the house.
Oriel Plas Glyn y Weddw
This gothic-styled mansion built in 1857 is in Llanbedrog and was five minutes walk from where I was staying.
Nowadays the building is used as an art gallery and museum. It also has an excellent cafe attached which I visited twice during my stay. It’s free to enter and certainly worth a visit if you are staying in the Llanbedrog area. The gallery hosts a permanent collection of Welsh porcelain (said to be among the finest in Wales) along with exhibitions of works by local artists.
Oriel Plas Glyn y Weddw also has some beautiful gardens and an outdoor theatre, which had some shows advertised for later in the year (though not during my visit). In the grounds there is also this carriage from the horse-drawn tramway which used to run from Pwllheli to Llanbedrog. Apparently this was a popular tourist attraction until the track was damaged by a heavy storm in the 1930s and subsequently abandoned.
Llanbedrog Beach
As mentioned, the beach (see cover photo) was about ten minutes’ walk from my apartment. It was sandy and quiet, and offered a perfect place for children to play. The beach huts were well maintained and picturesque. There was also a beach bar serving drinks and snacks all day (though not in the evening). I didn’t go here in the end as it was quite small and I felt a bit awkward about taking up a table on my own when families were queuing up. I did hear good reports about it, though, and it was certainly a lovely location (see photo).
Final Thoughts
As you may gather, I enjoyed my short break in Llanbedrog, and am happy to recommend both the town and the accommodation where I stayed for a short break. Llanbedrog is a lovely place to relax and chill out, and with its beautiful beach could also be a good destination for families with young children. Older children and teenagers might find the lack of other entertainments a bit limiting though.
As for me, this was the first time I had been away since last autumn. After many months of lockdown, I really appreciated the sea air and (mostly) sunshine, and of course the much-needed change of scene. I definitely plan to return there before too long.
As always, if you have any comments or questions about this post, please do leave them below.
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If you’re reading this post you will almost certainly know what an ISA is.
The term stands for Individual Savings Account. ISAs effectively serve as tax-free wrappers for various types of savings account. The two best-known types are the Cash ISA and the Stocks and Shares ISA.
You get an annual allowance for your ISA investments which currently stands at a generous £20,000 a year. Money saved in an ISA is permanently exempt from taxes such as income tax, dividends tax, capital gains tax, and so on.
So What Is An IFISA?
IFISAs are a lesser-known type of ISA that can be used for peer-to-peer (P2P) lending. They were launched in April 2016. After a slow start, the range available has grown steadily.
You can put any amount into an IFISA up to your annual ISA allowance. In the current 2021/22 tax year, as mentioned, this is £20,000. This can be divided however you choose between a cash ISA, a stocks and shares ISA, a Lifetime ISA (if eligible – you have to be under 40) and an IFISA. So, for example, you could invest £6,000 in a cash ISA, £10,000 in a stocks and shares ISA and £4,000 in an IFISA.
Note that under current rules you are only allowed to invest new money in one of each type of ISA in a tax year. It is though generally possible to transfer money from one type of ISA to another without it affecting your annual entitlement (although there may be platform fees to pay).
IFISAs vary considerably in the returns they offer. Annual rates range from from around 4% to 15%. Obviously, the higher rates reflect the higher levels of risk involved.
Although all IFISAs involve P2P lending, a number of different types are available. They may include lending for all the following purposes:
property development
business loans
personal loans
green energy projects
bonds and debentures
entertainment industry loans
infrastructure projects
What Are The Risks?
All UK IFISA providers have to be authorized by the Financial Conduct Authority (FCA) and HMRC. This doesn’t in itself protect lenders (or investors if you prefer) against the failure of a platform, however. While savers with UK banks and building societies are covered by the government’s Financial Services Compensation Scheme (FSCS), which guarantees to reimburse up to £85,000 of losses, this does not generally apply to IFISA platforms.
All IFISA providers do offer various safeguards, though. These vary, but include provision funds to cover potential losses, insurance policies, and so forth. In many cases loans are made against the security of property or other assets, which in the worst case could be sold to pay off any debts.
Even so, IFISA investors don’t enjoy the same level of protection in the UK as bank savers. This is, of course, a major reason why the returns on offer are significantly higher. It’s therefore important to be aware of the risks and ensure you are comfortable with them before investing this way. It’s also important to lend across a range of platforms and loans, and not make the mistake of putting all your savings eggs into one P2P lending basket.
What Are The Attractions?
So why might you want an IFISA? There are several reasons.
One is that they offer the potential of much higher rates of return that ordinary (bank) savings accounts. Even the best of these are currently paying interest rates of under 1 percent. IFISAs typically pay several times more than that (though obviously at somewhat greater risk).
Another big attraction of an IFISA is that it provides a way of gaining extra diversification for your portfolio. As mentioned earlier, the law currently only allows you to invest in one type of stocks and shares ISA per year. This rather perverse rule actually makes it harder to diversify your investments. But you can have an IFISA as well as a stocks and shares ISA, so long as you don’t exceed your total £20,000 allowance. So having an IFISA gives you a way of diversifying your investments while keeping them all protected within a tax-free ISA wrapper.
And finally, IFISA investments are typically not tied to the performance of stock markets in the way a stocks and shares ISA would be. This is a different type of investment, with different risks and rewards. While an IFISA won’t provide a way of hedging your equity investments directly, it is likely to be less directly affected by short-term fluctuations in the markets.
Two IFISA Examples
Two IFISAs of which I have direct experience are offered by Kuflink and Assetz Exchange. Both of these platforms offer tax-free IFISA options. They are both based around property investing.
Kuflink – which I reviewed in this post – offers an automatically diversified IFISA comprising loans on property. They quote interest rates from 5% to 7%, depending how long you invest for. Your money is automatically diversified across a range of secured loans. The screen capture below from the Kuflink website sets out the main features of their IFISA.
One point to be aware of is that there is no ‘self-select’ option with the Kuflink IFISA. So you have no choice about which projects your money is invested in. But, of course, it does make investing in a Kuflink IFISA very quick and simple.
Assetz Exchange – which I reviewed in this post – has some similarities with Kuflink. But they concentrate on low-risk investments, typically with corporate clients (e.g. charities) on long leases. Here’s an example of the sort of investment I mean…
Assetz Exchange aims to offer net yields to investors of between 5.2 and 7.2% per year. One thing I especially like about them is that you can choose your own IFISA investments (indeed, they don’t currently offer an auto-select option). In addition, you can invest as little as 80 pence per project, making it easy to build a well-diversified portfolio even if you are only investing small amounts.
I am using Assetz Exchange for my 2021/22 IFISA, so here is a screen capture of my current portfolio for your interest. Note that while I have only invested £500 so far, I already have a well-diversified portfolio with 17 different investments!
Summing Up
If you are looking for a home for some of your savings that can offer better interest rates than banks and building societies and won’t incur any tax charges, an IFISA is certainly worth considering.
As well as the higher interest rates, they can add diversity to your investments, helping you ride out peaks and troughs in the financial markets.
Just be aware of the risks involved in P2P lending, diversify as widely as possible, and ensure you invest only as part of a well-balanced portfolio.
As always, if you have any comments or questions about this blog post, please do leave them below.
Disclaimer: I am not a registered financial adviser and nothing in this post should be construed as personal financial advice. You should always do your own ‘due diligence’ before investing, and speak to a professional financial adviser/planner if in any doubt before proceeding. All investments carry a risk of loss.
This post (and others on Pounds and Sense) includes my referral links. If you click through and make a qualifying transaction, I may receive a commission for introducing you. This will not affect the products or services you receive or any fees you may be charged.
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Accountants are trained and experienced in all aspects of the tax system. They have both theoretical and practical knowledge of how the system works and how the (complex) rules are typically interpreted by HMRC. And they have to keep themselves up to date with the endless legal and procedural changes.
Also, unlike HMRC, an accountant is four-square on your side. They will advise you on the best way to organize your affairs to minimize your tax liability. They will answer any questions you may have, e.g. what records you need to keep. When the time comes, they will (if you want them to) compile your accounts and submit the relevant figures to HMRC in your tax return. And if any queries or problems arise, they will act on your behalf to try to resolve them.
A further benefit of having your accounts prepared by an accountant is that HMRC will know that a finance professional – someone who speaks their language – has compiled them. Other things being equal, this is likely to mean they will be more inclined to accept the figures and not dispute them.
Even if you aren’t self-employed or running a business, there may still be a strong case for getting an accountant to help with your taxes. Many older people, for example, have multiple streams of income, from stocks and shares to ISA accounts, property rentals to pensions. Some of this income may be taxable and some not, and varying tax rates and tax-free allowances may apply. Most accountants are more than happy to provide a service to people in this situation as well.
There is, of course, one drawback to engaging an accountant, and that is the cost. This will probably amount to a few hundred pounds a year (maybe more in some cases). Not to pay this, however, is in my view a false economy. A good accountant is likely to save you at least as much in unnecessary tax as they cost you. And the reassurance (and relief) of having a finance professional on your side when any queries with taxation arise is impossible to put a price on (but extremely valuable).
Of course, finding a good accountant who offers a service suitable for your needs isn’t always straightforward. And the amount they charge varies considerably. If you are looking for a keenly priced and easily accessible service, you might therefore like to check out what my friends at Simply Tax have to offer.
The Simply Tax Option
Simply Tax is a service run by professional accountants that provides a simple and inexpensive method for preparing and submitting tax returns to HMRC. They operate mainly online and are therefore able to keep charges to a bare minimum (starting from as little as £90). They say their service is for:
First time tax filers
Sole traders
CIS subcontractors
High earners (£100K+)
Landlords
Investors
Company directors
People living abroad
Anybody who needs a tax return
As the name indicates, Simply Tax aim to make the process of drawing up and submitting a tax return as simple as possible. In a nutshell, they say their procedure is as follows:
Create your free online account (just need your full name and email address)
Once verified, go into your user area and complete your personal information
Select the button to start your tax return (you’ll be taken to a screen to answer a few questions)
Once you’ve paid and been checked for your identification, simply drag and drop the information requested
We will do all the leg work and prepare the tax return for you
We’ll upload a draft tax return for you to review and approve electronically
Once you’ve approved, leave it to us to submit to HMRC
Although all of this is done online, you will be allocated a personal tax adviser whom you can contact at any time with any questions.
Simply Tax say their service will save you lots of time (they estimate between 70-80%) compared with filing your return yourself. They also estimate that their service is up to 50% cheaper than using a traditional high street accountant or tax advisor.
Finally, Simply Tax are fully regulated by the ICAEW (Institute of Chartered Accountants in England & Wales), providing added reassurance.
If you are looking for a straightforward, cost-effective way of preparing and submitting your annual tax return, in my view Simply Tax is well worth checking out. Okay, if you run a multi-million pound business empire it may not be for you. But if you are like most of us and just need a friendly, professional accountancy service who won’t charge an arm and a leg, they could certainly fit the bill.
As always, if you have any comments or questions about this post, please do leave them below.
Disclosure: This is a sponsored post on behalf of Simply Tax. If you click through any of the links and make a purchase, I will receive a commission for introducing you. This will not affect the fee you pay or the service you receive.
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Another month has passed, so it’s time for another of my Coronavirus Crisis Updates. Regular readers will know I’ve been posting these updates since the first lockdown started in March 2020 (you can read my April 2021 update here if you like).
As ever, I will begin by discussing financial matters and then life more generally over the last few weeks.
Financial
I’ll begin as usual with my Nutmeg stocks and shares ISA, as I know many of you like to hear what is happening with this.
As the screenshot below shows, the value of my main portfolio rose fairly steadily in the first half of April, after which it remained around the same level (apart from a brief dip around the 20th). It is currently valued at £20,430. Last month it stood at £20,078, so overall it has gone up by £352. I am happy enough with that.
Apart from my main portfolio, five months ago I put £1,000 into a second pot to try out Nutmeg’s new Smart Alpha option. This has done pretty well, so in April I added another £1,000 from some money returned to me by RateSetter (as discussed in last month’s update). This pot is now worth £2,067. Here is a screen capture showing performance in April.
I updated my full Nutmeg review in April and you can read the new version here (including a special offer at the end for PAS readers). If you are looking for a home for your new 2021/22 ISA allowance, based on my experience they are certainly worth a look.
I also added £400 (from RateSetter again) to my initial test investment of £100 with Assetz Exchange. As you may recall, Assetz Exchange is a P2P property investment platform that focuses on lower-risk properties (e.g. sheltered housing on long leases). I put £100 into this in mid-February and (as mentioned) another £400 in April. Since then my portfolio has generated £3.05 in revenue received from rental (equivalent to an annual interest rate of about 10% on my original £100 investment). Here’s my current statement in case you’re interested:
As you can see, even though I have only invested £500, I already have a well-diversified portfolio. This is a particular attraction of Assetz Exchange in my view. You can actually invest from as little as 80p per property if you really want to proceed cautiously!
You may also notice that some of the properties in my portfolio have gone up in value and some have gone down. This makes it a bit harder to judge overall performance compared with an equity-based investment like Nutmeg. The property values quoted by Assetz Exchange represent the best price you can sell at currently on the exchange, which is where all investments on AE are bought and sold. But they are only really relevant if you want to buy or sell that day. By contrast, Property Partner (a somewhat similar P2P property investment platform) quote a value for each property based on an independent surveyor’s valuation every 6-12 months. That means the values displayed on Property Partner are more stable, but of course they are only theoretical as there is no guarantee that this valuation would be achieved if the property was put on the market.
In case you’re not aware, everyone has a generous £20,000 tax-free ISA allowance in the current tax year (2021/22). However, for some reason the government only allows you to invest in one of each type of ISA in any particular.tax year. So you can only put new money into one stocks and shares ISA per year, but you can invest in a cash ISA and/or IFISA as well if you wish – just as long as you don’t exceed the £20,000 total limit. In the 2021/22 tax year I am therefore investing in a Nutmeg stocks and shares ISA and an Assetz Exchange IFISA. This gives me additional diversification compared with investing in just one type of ISA.
Moving on, I heard last month that I will not be eligible for any more SEISS income support payments for the self-employed. Along with many other self-employed people, my income took a hit when the pandemic struck and this money from the government came in very useful (though I do thankfully have a personal pension and other investments as well). However, I have become a victim of the rule that says to receive SEISS your average self-employed income must represent at least half of your total income.
For the first three rounds of SEISS that was indeed the case. However, the latest round of payments incorporates another set of tax returns (2019/20) when calculating average income. Because my income was lower in these accounts (partly due to the pandemic) my four-year average is now less than what I draw from my personal pension. So at a stroke I am no longer eligible for any more support. It’s not the end of the world, but I do find it bizarre that a scheme intended to support self-employed people whose livelihoods have been affected by the pandemic can cut off completely when your average income drops. Commiserations to any PAS readers who may have found themselves in a similar situation 🙁
Personal
In April, as I’m sure you know, some of the government’s lockdown restrictions finally began to be lifted.
I was glad to be able to go for a swim for the first time since Christmas, and have been doing so twice a week since it became possible again. I am a member of the David Lloyd Club in Lichfield which has two pools, one inside and one out. Although I’ve heard that you have to book slots at some swimming pools, that has never been the case at DL Lichfield, and in fact in many ways it feels reassuringly normal. Of course, you have to wear a mask as you enter the building, but thankfully not in the changing rooms or the pool 😀
I have just been told that if the pools get very busy, DL staff ask people to wait in the changing rooms until others have left. I haven’t witnessed this myself and don’t think it happens very often, but am happy to place this info on record.
What I do find bizarre is the rules about buying and consuming refreshments. The club room (aka coffee shop) at DL Lichfield is open for the purchase of drinks and light meals, but you can’t consume them within the building. You are, however, allowed to sit at a table in the club room (no need for a mask) to read and relax or just stare at the four walls. But heaven help you if you try to eat or drink anything.
I was told by a staff member that it was okay to take a drink to the outdoor pool as long as I was going for a swim, but not if I simply wanted to lie on a sunbed. Even though I am fast becoming a connoisseur of strange lockdown rules, this one seems barmy to me and I’d love to know how DL Lichfield plan to enforce it (“Unless you get in that pool in the next five minutes, I’m taking your coffee away.”). I’d like to support the DL club room/coffee shop, but the incomprehensible rules have defeated me. So I’m now taking a flask of tea and a biscuit with me and having that on the poolside or in the changing room after my swim. So far no Covid police have come for me.
I have also been pleased (and relieved) to have my hair cut again, six months after this was last done. Thankfully I didn’t have to queue up, as my hairdresser comes to me and cuts my hair in my conservatory. We have both had Covid jabs and agreed to dispense with masks and just kept the door and window open (thankfully it was quite a warm day). Again, it all felt reassuringly normal.
I haven’t so far taken advantage of the reopening of pub gardens, largely because it has been so cold (and wet) most days. It’s good to see at least some of my local pubs open again, but a shame they still aren’t allowed to open inside as well as out. Last year we had Eat Out to Help Out at a time when there were more Covid cases and deaths then there are now (just one death yesterday, I read). I am looking forward to May 17th when pubs and restaurants can reopen inside as well, but believe this has been delayed too long personally.
I am probably one of the few people who didn’t watch the Line of Duty finale. Indeed, I haven’t watched any of the series, as it didn’t really appeal to me. For one thing it sounded downbeat and depressing, and life has been grim enough recently. But also, it appeared a bit too complicated for my liking. Especially as i grow older, I find following series with large casts and labyrinthine plots increasingly challenging. I can remember laughing (affectionately) at my dad when he expressed confusion at the plot of some TV detective show, but I am obviously going down the same route myself now 😮
I have watched a couple of shows I enjoyed this month, though, so thought I’d share details in case anyone fancies giving them a try.
The first is an Amazon Prime Video series called Upload. This is a dystopian science fiction tale, set in a not-too-distant future when a method has been found for transferring people’s minds at the point of death (or before) to a virtual afterlife. This service is provided by a number of large corporations. They employ minimum-wage ‘angels’ in large warehouse-like offices to monitor these worlds and support the clients who live in them (at least, until their money runs out). It is quite a dark concept, but full of laugh-out-loud moments and some great characters. There is also a mystery in it, and a romance between a female ‘angel’ and one of her (deceased) male clients. It’s well worth a watch if you like something a bit different (and have Amazon Prime Video, of course).
I am also enjoying a US fantasy series called The Librarians (see below). I originally caught a couple of episodes on an obscure Freeview channel and decided I’d like to watch the whole (four) series from the beginning. Doing that proved a bit more challenging than I anticipated, but eventually I managed to track down a DVD box set on eBay.
The Librarians is a tongue-in-cheek fantasy series with a certain retro feel to it. It reminds me a bit of the old Avengers TV show in its heyday (with Diana Rigg as Emma Peel).
The Librarians are a group of misfits who are recruited to work at the mysterious Library, a place where magical artefacts of all kinds are stored. Early in the first series magic is released into the world again, having been suppressed for many centuries. In each episode the Librarians investigate some mysterious incident and try to stop evil individuals deploying magic for nefarious ends, generally using their intelligence rather than violence.
Again, it’s hard to explain in a few words, but you soon get the hang of things. And the characters, while perhaps excessively goofy at times, are all endearing in different ways. The Librarians is really old-fashioned family entertainment (with little if any swearing) and none the worse for that. If you can get hold of it – I’m not sure whether it’s on any streaming services – it offers an enjoyable (and at times hilarious) drop of escapism, something I guess many of us need at the moment.
As always, I hope you are staying safe and sane during these challenging times. If you have any comments or questions, please do post them below.
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I have written about property crowdfunding on various occasions on Pounds and Sense. It’s a way for ordinary individuals to invest in bricks and mortar without requiring huge amounts of capital.
Why Property Crowdfunding?
Property investors get a double benefit – rent from tenants for as long as they own the property, and – in most cases – a profit if and when they sell.
Of course, property doesn’t come cheap. And even if you can stretch to buying a modest house or flat for investment purposes, you are taking the risk of putting all your eggs in one basket. As a result, many people of more modest means have concluded that property investment is not for them.
Property crowdfunding has changed all that, however. A number of platforms now exist that allow ordinary individuals the chance to buy a share (or fraction) in an investment property. Investors then receive a proportion of the rental income generated and also get a share of any profit when the property is sold (or refinanced).
A further attraction of property crowdfunding is that the platform (and its agents) take care of managing the property and tenants on your behalf. Unlike direct property ownership, property crowdfunding (or crowdlending if you prefer) is a genuine hands-free investment.
Brickowner Review
Brickowner is one of a number of property crowdfunding platforms that also includes Property Partner, Assetz Exchange and CrowdProperty. They allow investors to buy a share of individual property investments.
Brickowner focuses on institutional investments. They buy shares in large, high-return property investment deals that were traditionally only offered to institutions or high-net-worth individuals. They then offer smaller shares in these (a minimum of £500) to members wanting to invest in them.
How It Works
Before you can access the Brickowner platform, you will need to register on the site and confirm that you are allowed by law to invest in this type of product. This is a requirement imposed by the Financial Conduct Authority (FCA), which regulates this type of investment. In practical terms it means you will have to confirm that you meet one of the following descriptions:
High Net Worth Individual – This includes individuals who have an annual income of £100,000 or more or net assets of £250,000 or more and have made a declaration acknowledging the consequences of making investments based on financial promotions that have not been approved by an FCA-authorised firm.
Self-certified Sophisticated Investor – This includes individuals who have prior relevant investment experience and have made a declaration acknowledging the consequences of making investments based on financial promotions that have not been approved by an FCA-authorised firm.
Representative of a High Net Worth Body – This includes companies and partnerships with at least £5 million net assets and trusts with assets of £10 million.
Investment Professional – Including corporate investors and SIPP or SSAS professional service providers.
You will also be required to answer some questions to confirm that you understand the nature of the investments that can be made on the platform.
Once you are registered (and not before) you will be able to browse from the range of currently available property investments, such as the example below:
If you see a current project you like, you can invest in it, from £500 up to the maximum available. You can (and probably should) build a diversified portfolio by investing in a number of different properties. You can add funds and increase the size of your portfolio any time you want.
Investments have a fixed term: anything from one to five years. During that time you may receive dividends from any rental income received. These are added to your account and available to withdraw or reinvest. You also receive a share of any profits along with return of your capital at the end of the investment period.
In common with other property crowdfunding platforms, the pandemic has caused delays – in some cases a year or longer – to some projects on Brickowner, As far as I am aware no projects have failed completely, though.
Secondary Market
Brickowner recently introduced a secondary market where investors who need to release funds before the end of an investment term can put their share up for sale to other members. Here is a screen capture showing part of the secondary market currently.
As you may notice, some of the projects on the secondary market have less than £500 available. I asked if this meant you could therefore invest less than £500 in these cases, but was told no. Here is the exact reply I received:
£500 is the minimum investment in both the primary and secondary market. The reason there are smaller amounts on the secondary market is that there is a taxi-rank system, whereby available shares are listed and allocated in order of listing to a queue of buyers. So if I wanted to invest, say, £520 in Tamlaght, and there were no other prospective Tamlaght share buyers ahead of me BUT there were only £120 worth of shares available, I would have to wait until £520 worth of shares were available before my transaction went through. Prospective Tamlaght buyers in the queue would have to wait until my order had been filled before they moved forward in the queue.
In effect, then, you would have to place a bid for at least £500 of the project in question, and would have to wait till additional sellers materialized before getting anything. That is probably not ideal, but I can understand that Brickowner want to avoid the situation where some investors end up with tiny holdings in certain projects.
Charges
Brickowner fees are outlined within the property term sheet for each specific investment. There is no charge for depositing money with Brickowner, and no charge at the end of the investment period when your money and (hopefully) profits are returned to you.
My Thoughts
Brickowner offers an interesting option for people who want to add property to their investment portfolio. As mentioned above, there is a good case for doing this both in terms of dividends and capital growth, and to diversify your overall portfolio.
The Brickowner website is attractive and professional looking. One thing I have noticed is that most of their investment opportunities fill up very quickly. That is good insofar as it indicates that Brickowner is succeeding in attracting investors who believe in the proposition being offered. On the other hand, it does mean that at any particular time there may not be many (or any) projects to invest in. You will therefore need to build your portfolio gradually.
As mentioned above, Brickowner has a minimum investment of £500. This is not as low as some platforms (e.g. Assetz Exchange will let you invest as little as 80p) so it may be less suited to investors on a limited budget. But on the positive side, they are transparent about the fees they charge, and it is good that no fees are imposed for depositing or withdrawing money. It’s also good that a secondary market now exists for investors who wish (or need) to exit early.
As you can see from the screen capture above, the projected returns on investments with Brickowner are at the higher end for property crowdfunding platforms. Of course, this generally means the risks are higher as well. In any event it is important to read the financial information on each project carefully, to ensure that the investment aligns with your own needs and goals. Bear in mind also that some projects offer income as well as the potential for capital appreciation, while others aim for capital growth only.
During the coronavirus pandemic and lockdown, property transactions slowed considerably and many commercial property values in particular fell. However, there is clear evidence that a recovery is now under way. My own view is that there are good opportunities at present for property investors, but obviously in this uncertain time there are never any guarantees. Every investor needs to assess the situation carefully in light of their personal circumstances and tolerance for risk and proceed accordingly.
Investor Protection
The returns on offer from Brickowner are significantly better than you would get from a bank savings account at present, but clearly they don’t carry the same level of protection. For example, you are not protected by the Financial Services Compensation Scheme, which will refund up to £85,000 if a bank with which you have an account goes bust.
On the other hand, your money is invested in bricks and mortar, so it’s unlikely you would lose it all. A further level of protection is that – in common with other property crowdfunding platforms – your money is invested via an SPV (Special Purposes Vehicle). This is effectively an independent company with responsibility for the project in question. If Brickowner were to go bust, funds in the SPV would be protected and returned to investors once the property was sold.
Even if Brickowner were to go under before your money was invested, your funds are paid into a separate, ring-fenced client account. If the platform went belly-up the day after you sent the money, your funds would simply be returned to you.
Overall, then, whilst investing in Brickowner is clearly not as safe as leaving your money in the bank, the measures set out above do provide a reasonable level of protection (and reassurance). As with any investment, however, the higher potential returns on offer come with a greater risk of loss. In my view (and I’m not a qualified financial adviser, just an individual who has put thousands of pounds of his own money into property crowdfunding) Brickowner offers a reasonable balance between risk and reward. But clearly, you should invest only as part of a balanced portfolio combined with other, more liquid types of investment. .
If you would like more information about Brickowner and to set up an account, just click through any of the links in this post.
Disclosure: The links in this post are affiliate links. If you click through and set up an account at Brickowner and make an investment with them, I may receive a fee for introducing you. This will not affect the terms or returns you are offered. Please note also that I am not a registered financial adviser and nothing in this post should be construed as personal financial advice. Before making any investment it is important to do your own due diligence, and seek advice from a qualified financial adviser if you are in any doubt how best to proceed. All investment carries a risk of loss.
If you have any comments or questions about Brickowner or property crowdfunding in general, as always, please do post them below.
Note: This is a fully revised and updated repost of my original article about Brickowner.
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Today I’m looking at P2P property investment platform Assetz Exchange (launched in January 2019)..
As I have noted before on Pounds and Sense, I am something of an enthusiast for property investment (and specifically property crowdfunding). Among other things, I like the fact that you can make money from both rental income and capital growth. And investing in property can be a good way of spreading the risk when you have equity-based investments.
Of course, investing in property directly is costly and carries all the risk inherent in putting all your eggs in one basket. A major attraction of P2P property crowdfunding investment is that you can get started with much less money and build a diversified portfolio to help mitigate the risks.
In addition, if you invest this way you don’t have to deal with the day-to-day hassles of being a landlord, from finding tenants to repairing broken boilers. This is taken care of by the platform itself and/or their management company. You just have to sit back and – all being well – wait for the rental income and (hopefully) capital gains to materialize.
That said, there have been a few reversals in the P2P property sector over the last few months (see this recent post, for example). So I am now more concerned than ever to ensure that any investments I make in this category control risk as effectively as possible.
What Is Assetz Exchange?
As mentioned above, Assetz Exchange is a licensed P2P property investment platform. It is owned by well-known P2P lending platform Assetz Capital, but run quite separately from them. If you already have an account with Assetz Capital, you will have to register separately with Assetz Exchange.
Assetz Exchange aims to offer net yields to investors of between 5.2 and 7.2% per year. These are generally paid by institutional tenants through multi-year leases. All properties are unleveraged, providing additional security (and stability) for investors.
Assetz Exchange has some similarities with Property Partner, but they differ in some important ways. For one thing, many of the properties are rented out to charities (e.g. NACRO) or housing associations. These organizations generally sign longer contracts than private individuals. They don’t have voids (periods when the property is untenanted and producing no income). Neither are there any maintenance costs, as the organizations take responsibility for this themselves. And finally, these organizations are directly funded by the government, giving them a secure income stream.
Another area of specialism is show homes. Working with a national housebuilder, Avant Homes, Assetz Exchange purchases fully furnished show homes from multiple sites around the country. These are then leased back to the developer for fixed periods of up to five years to be used to help sell other plots. This eliminates potential void periods and avoids any maintenance costs. At the end of the leases, investors will be able to vote on whether to lease the houses to tenants or sell them to home-buyers on the open market.
Assetz Exchange also offers investors the chance to get involved with a new generation of modular eco-homes. This is already a popular approach to house-building in Europe and the United States. Assetz Exchange fund the acquisition and conversion of land into serviced plots, allowing buyers to then order a house to be built on that plot to their own specification. These modular-built eco-homes are sustainable and low energy. They are also typically quick to complete and have a lower impact on the environment.
Assetz Exchange do also buy and let some standard properties as well, offering investors the chance to further diversify their portfolios.
Signing Up
Before you can invest through Assetz Exchange, you will of course have to sign up on the platform. This is pretty straightforward. You just visit the Assetz Exchange website, read the information there, and click on Register in the top-right-hand corner.
You will then be required to enter your contact details and confirm which of four categories of investor you fall into. The options are as follows:
High Net Worth Investor – This includes individuals who have an annual income of £100,000 or more or net assets of £250,000 or more.
Self-certified Sophisticated Investor – This includes individuals who have made more than one peer-to-peer investment in the last two years or who meet certain other criteria relating to investment experience. This is the category I selected myself.
Investment Professional – Including corporate investors and SIPP or SSAS professional service providers.
Everyday Investor – This category is for investors who don’t fit into any of the categories above. They can still invest via Assetz Exchange but must pledge not to invest more than 10 per cent of their portfolio in P2P loans.
You will also be required to answer some multiple-choice questions to confirm that you understand the nature of investments that can be made on the platform. I found some of these questions quite challenging, and was pleased to get them all right first time. I would therefore recommend reading the information on the Assetz Exchange website (including the Help pages) carefully before proceeding to register. If you do make any mistakes, however, feedback is provided, and you can take the test again until you achieve a 100% correct score.
Once you have done all this, you will be able to fund your account. This must be done by bank transfer, as Assetz Exchange do not allow debit card payments. You will then be able to browse the range of currently available property investments:
Investing
Once you are registered on the platform and signed in, click on Exchange in the menu at the top of the screen and all current projects will be displayed. Here are a couple that are showing at the time of writing…
Clicking on any of these will open a page devoted to the investment concerned. Here you can read all about it, view reports and site plans, and so on. One very important area is the Order Book (see example below).
All buying and selling on the platform is conducted via an exchange (otherwise known as the Order Book) which works similarly to the secondary market on Property Partner.
So if you want to buy shares in a particular project, you can do so by accepting the best price currently available on the exchange. In the example above, there are £4,895 of shares available at zero discount (i.e. the original offer price).
If you want to get your shares at a lower price than this, you can make a bid. In the example, an investor has put in a bid for £75 at a 1.04% discount and another investor (or maybe the same one) has put in a bid for £154 at a 2.08% discount.
Conversely, if you wish to sell some or all of your shares at any time, you can accept the best bid (or bids) on the Order Book currently, or place an offer and wait to see if this is matched.
It does take a little bit of getting your head around at first, but it’s actually a simple and straightforward process. One thing to note is that if there is nothing showing on the right-hand-side of the Order Book (under Offers) you won’t be able to buy shares in that project there and then – though you can of course place a bid if you wish and see if a seller wants to match it.
In any event, if you want to buy, just click on the green Buy button (either on the Exchange page or the details page) and complete the short online form. You will need to indicate how much you want to invest, whether this should be from your General or IFISA account (see below), and whether the amount should include the FCC or not (see What Are The Charges? below).
You will also need to indicate whether you want to buy at the current best price (selected by default) or you want to try for a better price (in which case your bid will be added to the left-hand column in the Order Book).
The IFISA Option
As mentioned above, if you wish you can invest with Assetz Exchange via an IFISA (Innovative Finance ISA). As discussed in this recent post, this type of ISA for P2P investing gives you the same tax advantages as a cash or stocks and shares ISA. You don’t have to pay any tax on the money you make, whether this takes the form of dividends, income or capital gains.
Everyone has a generous annual ISA allowance of £20,000 in the current 2020/21 tax year (and next year as well). This can be divided any way you like among the three types of ISA. So if you open an Assetz Exchange IFISA, you can still have cash and stocks and shares ISAs with other providers as well, so long as you don’t invest more than £20,000 in total. You can also only invest money in one of each type of ISA in any one financial year.
Choosing the IFISA option on Assetz Exchange is very easy. You can do it when first registering on the site or later. The only extra thing you have to do is enter your National Insurance number.
If you have maxed out your ISA allowance – or have already invested in another IFISA in the current tax year – you can still invest via your default ‘Regular’ account. You can invest any amount this way, but of course any profits you make will potentially be taxable.
What Are The Fees?
Assetz Exchange do not charge any monthly fees to investors (this is in contrast to Property Partner, who made the unpopular decision to impose an Assets Under Management charge and monthly fee, greatly impacting small investors on the platform especially). The company does have to make money somehow, of course, and they do this from three sources:
Arrangement fee
When a property is first purchased, Assetz Exchange charge an arrangement fee which is included in the Fixed Costs & Contingency (FCC). When parts of the property are sold on the Exchange, this fee is added to the purchase price of the buyer (see above) and so is recovered by the seller. The size of this fee is included in the loan conditions.
Monitoring fee
Assetz Exchange charge a percentage of the gross rent received for the property. The percentage is stated in the loan conditions of the property.
Property disposal fee
A fee of 2% of the gross sales proceeds is charged if investors vote to sell and the property is physically sold.
What Are The Safeguards?
Like most other property crowdfunding platforms, all investments in any project on Assetz Exchange are held in a Special Purpose Vehicle (SPV) for the project concerned. This gives investors in the project some protection if the main company were to go into administration.
A contingency balance is held within each SPV which acts in a similar manner to a provision fund, covering unexpected short-term cash-flow disruptions. It is topped up from receipts and no distributions are made to investors if it falls below a certain level.
SPVs also benefit from indemnity insurance which covers non-payments from tenants. This in theory also covers disruption to cash-flow, but it does not cover voids (periods where the property does not have a paying tenant). For reasons mentioned above, voids should not be an issue with most of the properties listed on the platform.
In common with most other P2P investment platforms, Assetz Exchange does not fall within the remit of the Financial Services Compensation Scheme (FSCS), which covers customers with UK financial services firms up to £85,000 if the institution in question were to go bust.
3. Low minimum investment (as little as 80p per project!) – this makes building a diversified portfolio straightforward.
4. Assetz Exchange take care of all the work involved in buying and managing properties. You just choose which ones to invest in.
5. Option to access money any time by selling on the secondary market (though this does depend on another investor being willing to buy your shares at a price you find acceptable).
6. Relatively low-risk investment options (though of course there are no guarantees)
7. Customer support (in my experience anyway) is fast, friendly and helpful.
8. Charges are reasonable. There is no charge for selling investments.
9. Potential to make money through both capital appreciation and rental income.
10. Rental income is paid into your account every month. You can either withdraw or reinvest it.
11. No monthly fees and only transaction-based charges to pay.
12. Opportunity to invest in socially beneficial developments such as sheltered housing
13. Tax-free IFISA option to which any investment on the platform can be added
14. Investors can vote for their favoured exit option (e.g. selling up) when the time comes
Cons
1. Can’t invest using a debit card
2. No auto-invest option currently available
3. Not as many opportunities as some P2P platforms (although the number is increasing steadily)
Closing Thoughts
I was impressed enough with Assetz Exchange to invest a small amount (£100) of my own money initially and will report back on PAS about how my portfolio fares. Here is how it’s looking at the time of writing, roughly a month after I opened my account. As you can see, my initial investment has grown by £3.87 from a combination of income received and capital growth. For a month that’s not bad at all – if it carries on growing at that rate I’ll be delighted! – but of course it is much too soon to draw any firm conclusions from this.
I particularly like the fact that with the low minimum investment on Assetz Exchange, even if you’re starting very cautiously (as I am) it’s easy to build a diversified portfolio. I like the relative simplicity of investing on the website and the fact that you can exit an investment any time via the exchange (though that does depend on willing buyers being available at a price that is acceptable to you). It is also good that there are no charges associated with selling on the exchange.
You can, of course, withdraw uninvested funds from your Assetz Exchange account at any time.
Obviously there are risks in any form of investing and it is important to do your own ‘due diligence’ before proceeding. You should also bear in mind that this type of investment is not covered by the Financial Services Compensation Scheme, which covers savers with UK banks and other financial institutions up to £85,000. On the other hand, the potential returns are significantly better than the fractions of a percent typically on offer from savings institutions right now, while the risks appear to be at the lower end of the spectrum, with many of the properties on long-term leases with corporate/institutional tenants.
To be very clear, nobody should put all their spare cash into Assetz Exchange (or any other investment platform for that matter) but in my opinion there is definitely a case for including AE within a diversified portfolio.
As mentioned above, I shall be reporting back on how my Assetz Exchange investments perform on PAS in future. In the mean time, if you have any comments or questions about this post, or Assetz Exchange more generally, please do leave them below as usual.
Disclaimer: I am not a registered financial adviser and nothing in this post should be construed as personal financial advice. You should always perform your own ‘due diligence’ before making any investment and speak to a qualified professional adviser if in any doubt how best to proceed. All investments carry a risk of loss.
Please note also that this review uses my affiliate links. If you click through and make an investment or perform some other qualifying transaction, I may receive a commission for introducing you. This will not affect any charges you pay or the product/service you receive.
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