Octopus’ P2P solution ‘Octopus Choice’ now available within a SIPP

Octopus Investments, part of Octopus Group, has announced that its peer-to-peer (P2P) investment platform, Octopus Choice, is now accessible within a SIPP wrapper.

Octopus Investments has partnered with specialist pension providers, Hartley Pensions (a Wilton Group Company) and Morgan Lloyd, who are the first providers to offer access to Octopus Choice within a SIPP (self-invested personal pension).

The move follows increasing demand from financial advisers and direct investors who want to access P2P lending within a tax efficient pension wrapper¹. While P2P is considered a ‘non-standard’ investment for SIPPs (not covered by the FSCS, with capital and liquidity risk), Octopus hopes to grow the number of financial advisers offering P2P as part of the financial planning process.

Octopus Choice is a property backed P2P lending platform launched in 2016 and developed by Octopus Investments with advisers in mind. It now has over 1500 advisers signed up across the UK and over £250 million currently under management. To date it has generated nearly £15 million of interest for its investors, who have also withdrawn more than £134m successfully².

The SIPP market is growing rapidly. A July 2018 study from GlobalData, citing figures from the Association of British Insurers, highlighted that the SIPP market had grown by 60% since 2016 and is now worth £2.4 billion³. SIPPs are increasingly viewed as an attractive option, particularly following the introduction of pension freedoms in 2015, as holders are able to actively choose and manage their investments.

Charlie Taylor, Head of Octopus Choice, comments:

“We’re delighted to partner with Morgan Lloyd and Hartley Pensions and give their customers access to Octopus Choice within a SIPP. It’s something many advisers and their clients have been asking for, so it’s great to be able to give them this option.

“Property backed peer-to-peer lending is an alternative asset class that aims to offer lower volatility than equity markets and targets regular income. Octopus Choice, for example, aims for the equivalent of 4% per annum. These qualities can make it an attractive option for certain people, comfortable with the risks of the asset class, who want to diversify their SIPP portfolio.”

Michael Barber, Technical Director at Hartley Pensions, comments:

“We’ve been working with Octopus for some time now and we are very pleased to be partnering with such a forward-thinking company to provide this solution to new and existing clients.”

John Dowding, Technical Director at Morgan Lloyd, comments:

“It is a fantastic opportunity to join forces with Octopus to promote the valuable benefits that P2P investments offer our SIPP clients. This could be a great product for SIPP clients looking to diversify their investments and for those looking to target a regular and consistent income stream, particularly for some clients when entering drawdown.” 

More about Octopus Choice

• Minimum investment is £10
• Loan breakdown -65% buy-to-let properties, 17% for bridge-to-let, 15% for commercial and 3% for bridging loans
• Funded almost 700 loans to date incurring zero capital losses
• Octopus underwrites every transaction including a full review of the borrower and the property
• Mitigating risk – Octopus lends a maximum of 76% LTV, with an average LTV of 63%, secured against the underlying property
• Mitigating risk of capital loss – Octopus has a first charge on the property that secures every loan
• Aligning interests – Octopus co-invests in every loan, and stands to lose all its invested capital before investors lose any
• Octopus Choice is also available through an Innovative Finance ISA wrapper