Scenario analysis

What happens if…

At Zopa, we factor expected defaults into target returns. This means a more accurate target, and fewer nasty surprises down the line. But how much would default rates have to change before your portfolio would be significantly impacted?

Let's take a look at how changes in default rate could affect the annual return of the entire product portfolio.

Scenario analysis: Core

Here's an example of what could happen if Core's default rates were to significantly drop or increase from what we originally expected when the loans were originated.

* Weighted average return / default (taking loan size into account).

Last updated 12 September 2018. Numbers based on expectations for disbursals from January to June 2018.

Scenario analysis: Plus

Here's an example of what could happen if Plus' default rates were to significantly drop or increase from what we originally expected when the loans were originated.

* Weighted average return / default (taking loan size into account).

Last updated 12 September 2018. Numbers based on expectations for disbursals from January to June 2018.

Safeguard

We used to offer products with coverage from a provision fund called Safeguard. We began retiring these products on 1 December 2017 due to changes made by HMRC around tax relief on bad debt.

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Remember, with peer-to-peer investing your capital is at risk, and your actual return may be higher or lower than the advertised projected target return. Unlike a savings account from a bank, you're not protected by the Financial Services Compensation Scheme (FSCS). Tax treatment depends on individual circumstances and may be subject to change in the future. Our risk statement has all the details.

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