Can Peer Lending Save us From The Pension Crises. By Ablrate.com
After the successful launch, Ablrate the worlds first asset backed peer to peer lending platform in aircraft, is writing a few articles on questions asked by investors.
United Kingdom (PRUnderground) September 3rd, 2014
How could peer lending can solve the looming pension crisis? OK so a bold title and one which will, no doubt, give me some headaches with comments, feedback and as my business partner sarcastically puts it ‘free advice’. All I ask is that you hear me out and take time to think on my opinion and form your own.
I base this particular article on a shock I have had in the last few weeks and it concerns my pension. I was in the Royal Air Force for 4 years and when I left I transferred my pension entitlements to a private pension scheme; that was 26 years ago. We were told the stock market was awesome, we couldn’t lose and by the time I retired that little nest egg of £1,500 would be great. As long as I contributed through my life I would retire with a nice income.
So, curious, I enquired at how much the £1,500 of my money is worth now, turns out it is worth £6,500 which equates, by my math, to 5.8% per annum – I backed filled it to 2010 as a comparison (as we have seen the markets strong in the last couple of years) and it would have been 3,500! Now I am open to your comments but no one can tell me that is a great return over 26 years. The stock market has boomed, property has gone bananas, commodities have gone through the roof; basically you would have been pretty unlucky to lose money over this period, but 5.8% p.a – seriously?
You and I both know where my money was eaten up, it was in charges; commission charges, fund management charges, annual charges etc. To be honest I reckon I could have done far better myself, in fact I know I could have.
It brings me then, to my title. Firstly, let me talk about ‘looming pension crisis’. People of my age have lived through an unbelievable few decades, dramatic growth and turbulent times. We have been lucky with property but we have seen reduced wages (against cost of living) and we are not savers, in general. You only have to look at the consumer debt to know that. When it comes to us retiring, many will be relying on property to achieve this, and maybe it will work out for some, but I am willing to bet that the strain on governments will become greater and greater. The generation behind us, who are barely able to afford to rent never mind buy, will not have property to fall back on. It all spells trouble ahead.
So to my second part… peer lending saving us…. OK it may be a little simplistic, but what the peer lending industry is doing is distributing wealth, taking out a huge chunk of the drain on investments… the charges associated with traditional investment. It is also giving good returns on a regular basis with the ability of investors to be hands on with an ease that has never been seen before. Yes, we have had trading systems for years and if you know your ‘stochastics’ from your ‘relative strength index’ you have probably done OK, but if you don’t you might have entrusted someone else to manage your portfolio. If you have had my results, which more than likely you have, you must be feeling a little cheesed off right now, I know I am.
I run Ablrate.com the asset backed peer lending platform for the leasing industry. I know I can get 10% per annum, minimum, on loans across our platforms that are solid investments. Yes there is a risk of loss that could reduce my returns, and you should be aware of those before you consider peer lending, but risk is ever present in the stock market also.
Never before, however, have people had so many options that they can manage on their own, with transparent information and, generally, knowable returns. Of course peer lending returns are taxed but with the coming ability to invest through ISAs and SIPPS this will be negated and that will bring a wall of money into the marketplace. I believe that will also bring more opportunities to invest.
I am moving my pension to a SIPP, I will be investing it across the Ablrate platform and kissing goodbye to the mangers who have managed to do little but line their pockets with my cash for 25 years. I believe that there will be many more, as the industry progresses, that will do the same.
If the peer lending industry has not been crushed by regulation, I believe that those who take the time to understand the industry, understand the risks and understand how to select loans on platforms based on risk and return, will do much to save our country from a pension nightmare.
RISK NOTE: Investing on peer lending platforms have an inherent risk of loss. Even though some platforms, like Ablrate.com, have assets backing transactions there is still the risk of default of the loans and loss of some or all of your money. Anyone considering investing in peer lending platform loans should make themselves fully aware of the risks of doing so as there are no guarantees that returns will be consistent with those suggested in this article. This article is the opinion of the author and not necessarily that of Ablrate.
Read the latsest article on Ablrate by Reuters
Ablrate launched the worlds first asset backed peer to peer lending platform dealing primarily in aircraft deals. It allows investors for the first time to invest in aircraft transactions with high ROI\\’s.
Ablrate strives to be the global leader in asset backed lending against aircraft and other quality assets. Our purpose is to enable individuals and businesses to manage their own financial risk and returns. Helping our clients succeed and get a better, fairer deal in the world\\’s rapidly evolving financial markets. Our mission is to be the best in the eyes of our clients, employees and shareholders. For more information go to www.ablrate.com