Peer to peer accounts (P2P) can offer a higher return compared to savings accounts because they lend your money to people and businesses.

You could lose some or all your money if a borrower fails to repay you.

Any money invested in P2P is not protected under the Financial Services Compensation Scheme (FSCS), meaning you could lose your money if the P2P company goes bust.

Use the table above to find the highest return on P2P accounts, but make sure you understand the risk before you invest.

What are the risks?

If your investment is not repaid by the borrower, there is a chance you could lose some or all of your money.

Most peer to peer companies have their own financial compensation scheme to protect you from failed repayments from borrowers.

These schemes are not unlimited, so if a large number of borrowers miss their repayments, there is still a chance you could lose your money.

Are peer to peer accounts taxed?

Yes, but not automatically by the P2P company.

You need to complete a self assessment form each year to declare how much money you make from your peer to peer investments.

The exception is when you invest in an innovative finance ISA, which is tax free.

Do all peer to peer investments offer a fixed return?

No, some peer to peer companies offer a variable return instead, which gives you the opportunity to choose how much you get.

This works by a P2P company matching you with potential borrowers, which could be a person or business, then you and other investors bid to lend your money to them.

If a borrower accepts your bid, they will borrow your money over a set term and pay you back monthly as if they were paying back a loan to a bank.

Although you could get a higher return compared to a fixed P2P account, you could also get underbid by another investor and have to wait longer to start making money.

Peer to peer FAQs


Is my money safe in a peer to peer account?


No, if a P2P company goes bust you could lose all or some of your money so make sure you understand the risk before you invest.


Can I withdraw money from my P2P account?


Only at the end of the term, but sometimes you can sell your investment to another investor to get your money back.


Where can I open a P2P account?


Peer to peer investments are only available online, our table helps you filter each account by the return offered and where your money will be invested.


How can I reduce the risk to my money in P2P?


If you invest your money with a larger number of borrowers, there is a lesser risk that your money will not get repaid.


Can I find out how stable a P2P company is before I invest?


Yes, by looking at the percentage of completed repayments they had from previous investments. This is usually found on their website.