RateSetter, a UK peer-to-peer (P2P) lender, has moved into retirement savings with two Sipp providers – London & Colonial and European Pensions Management, enabling Sipp holders to lend within their pension tax wrapper.
RateSetter, which has arranged loans of more than £550 million since launch in 2010, says it has worked to address barriers to holding P2P loans within a Sipp.

RateSetter's distribution agreements with London & Colonial and European Pensions Management will enable pension holders to diversify their portfolios to capture the income available from P2P lending, says the company.

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RateSetter's founder Rhydian Lewis, said: "We are delighted that RateSetter is now available via Sipps. SIPPs were designed with investor control and choice in mind and so it seems fitting to include P2P lending. There is an overlap between our customer base and those likely to invest via a pension – over 19% of our lenders are in retirement age – and a lot of them have Sipps.

"We are pleased to be launching our product with two forward-thinking companies and hope other Sipp providers will look to include P2P as an option for their Sipp holders."

Adam Wrench, head of product at London & Colonial, said: "Historically Sipps have always been at the forefront of pension industry innovation, so embracing new ways in which to fund traditional Sipp investments seemed to us to be a natural progression.

"With the recent radical changes to the pension's landscape and the new flexibility being afforded to SIPPs and drawdown contracts, the hunt for high yielding income returns to back drawdown arrangements is on. We see P2P lending as playing an ever increasing role as the pension market moves away from traditional conventional annuity options."

Francis Moore, chairman of European Pensions Management, said: "With interest rates at historic lows and demand for high income returns at an all-time high, the move by RateSetter to open up Sipp accounts to P2P loans could not be more timely.

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"As with any investment there are risks but they add to the options that a Sipp member might include in a diversified Sipp portfolio and we welcome the safety net that RateSetter has created to manage loan interest and capital defaults."

"European Pensions Management has a proven history of innovation in the SIPP field. Our flexibility is supported by our own in-house developed systems making for cost effective but flexible solutions for customers including online applications and online account servicing - an ideal combination to set alongside the new P2P market in which RateSetter is a clear leader."