Zopa reopens to new investors

Zopa is accepting new investors for the first time in nearly a year. So how do its products compare to rival peer-to-peer lenders?

Love Money
Last updated:27 January 2018 - 09.23am

Ten months ago, Zopa closed its doors to new investors as it was struggling to cope with demand.

It meant many investors' money was simply sitting there earning nothing.

In response, it introduced a waiting list for new customers so that existing funds could be prioritised.

Now, Zopa has announced that everyone on the waiting list will be able to invest, while anyone joining from today will be put on the waiting list with a wait of around a month before they can invest.

“New Zopa investors will join a community of more than 60,000 active investors from across the UK, earning attractive rates of return,” says Andrew Lawson, chief product officer at Zopa

“Investors will get access to an asset class that offers a higher return than cash, in exchange for the risk of lending, and less volatile returns than in stocks and shares.”

Compare stocks & shares Isas and other investments (capital at risk)

What can you invest in?

You will have four options of where to invest your cash with varying interest rates depending on how much risk you are prepared to take with your loans.

Remember, with peer-to-peer you are lending your money to others so there is a chance they could default on their repayments and you could lose some of your money.

But, Zopa spreads your money across a large number of loans in order to keep the risk of a loss to a minimum.

Zopa also now offers two Innovative Finance ISAs (IFISAs). which let you invest up to £20,000 per tax year and the growth is tax-free.

There is a minimum investment of £1,000 across all four products.


Risk Markets

Target return


A*, A, B, C



A*, A, B, C



A*, A, B, C, D, E



A*, A, B, C, D, E


Falling returns

While there will no doubt be a rush to invest with returns of up to 4.6% luring in new customers, the rates aren’t as good as they once were.

Back in June, the IFISA Plus had a targeted return of 6.1%, meaning a £20,000 investment could have grown to £21,220 in 12 months. Now an investment in the same product is expected to return 4.6% or £300 less.

Go further back, to November 2016 and the Plus product had a targeted return of a whopping 6.7%.

There was good news for risk-averse investors though: they will actually get an improvement with the targeted return on the Core products up slightly from 3.9% in June to 4% today.

Rates may have fallen, but they have across the board so Zopa is still looking like an attractive option to savers prepared to take a little more risk with their cash in order to boost their returns.

The best rate on a cash savings account at present is just 2.55%, and you’d have to lock your money away for seven years to get that.

However, Zopa’s competitors do offer better rates at present. Ratesetter has a five-year product paying 5.5% a year and Lending Works targets a 6% annual return on its five-year product, of 4.5% over three years.

If you are looking for an IF ISA then again Lending Works pays 6% per annum over five years.

[Read more: How I saved enough to retire at 55]

Cash bonus for existing investors

People who already have money lent out through Zopa could also benefit from the re-opening of the books to new investors.

Zopa is offering a £50 reward to customers who refer a friend to the peer-to-peer site. Plus, they will receive a ‘Fast Pass’ they can use to help their friends move up the waiting list.