Innovative Finance ISA: What It Is and the 2027 Rules

An Innovative Finance ISA shelters interest on peer-to-peer loans and crowdfunded debt from UK tax. The £20,000 ISA allowance is shared across all wrapper types.

IFISAs are NOT FSCS-protected. If the platform fails, you can lose your entire investment. Several UK P2P platforms have collapsed since 2019.

From April 2027, the same anti-circumvention rules that hit stocks and shares ISAs also hit IFISAs: a charge on cash interest, a ban on transfers into cash ISAs, and cash-like tests on what counts as an investment.

For most UK savers, an IFISA is not worth the risk. The yield premium over a cash ISA rarely compensates for the platform-collapse risk it carries.