An update on P2P at Zopa

Today, we have an important update about the future of our P2P business.

After 16 years of peer-to-peer (P2P) investments at Zopa, we have taken the decision to close our retail investing business.

This has been a tough decision, and not one we have taken lightly.

We deliberated several options for how to close the P2P side of our business in a way that delivers the best outcome for our customers. After careful consideration, we have decided that the best way forward is the sale of all retail investor portfolios at full value. This will lock in the interest earned by Investors so far and ensure the timely return of their money.

To make this as smooth as possible, Zopa Bank will be buying the P2P loan portfolio and P2P customers will receive their investment balances back by the end of January.

In this section we would like to explain why we’re doing this, and what it means for our customers.

**Why we’re doing this **

We’re so proud of what our P2P business has achieved.

Due to our prudent, data-led approach to lending, we have delivered positive returns to our investors for 16 consecutive years - including throughout two financial crises. Since launching our platform, the average return has been 5%. Even during the Coronavirus pandemic and the subsequent lockdowns we were still able to deliver an average return of 3.9%.

However, over the last few years, customer trust in P2P investing has been damaged by a small number of businesses whose approach led to material losses for retail investors.

Linked to this, the changing regulation which followed raised the operational costs of running a P2P business, as well as the cost of attracting new investors to the Zopa platform. To offset these increased costs and ensure we have a sustainable and profitable business, we’d need to reduce investor returns to a point where they’d no longer be attractive and commensurate with the risk that investors take on.

For these reasons, we have decided to fully focus our attention on our Bank.

Since the launch of Zopa Bank in June of last year we’ve seen strong demand for our new products, such as our award-winning credit card and fixed term savings accounts, which many of our investors have already opened. 

This early success shows that we’re able to help more people through our fully regulated Bank, offering our customers a wider range of financial products.

**What happens next? **

By 31 January 2022 our investors will receive the full value of their invested balances in their Zopa holding accounts. This means that no investor will miss out on any of the interest they’ve already built up.

There will be no impact on borrowers as Zopa Bank already services them and their loans will continue unimpacted.

Our customer service team remains on hand for anything that our investors need during this transition. Our FAQs have also been updated to provide the helpful details that our customers need to know.

We’re extremely proud of our peer-to-peer DNA and are honoured that over 90,000 Investors joined us on this journey over the last 16 years. 

From everyone at Zopa, we thank every single investment customer for their continued support in making Zopa what it is today.

We’re excited about what the future holds and can’t wait to share further updates with our customers soon.

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