• Equifax data shows reserve funds may not protect against major market movements
  • Supported by Sir Edward Leigh MP, former chair of UK Public Accounts Committee
  • London start-up now lending over £1m a month after just 10 months in business

Lending Works, the only peer-to-peer lender to have insurance protecting lenders’ money against borrower defaults and fraud, has announced the rollout of an extended insurance to safeguard savings against an even greater range of risks affecting borrowers’ ability to repay loans. These include all the major reasons for default such as accidents, illness, death and loss of employment.

With the enhanced Lending Works Shield in place, even in the event of another major market downturn, where loan repayments may be harder to collect and arrears can rise, Lending Works’ insurance cover will safeguard savers’ funds.

Matthew Powell & Nicholas Harding (L-R), Lending Works
Matthew Powell & Nicholas Harding (L-R), Lending Works

In research conducted in partnership with Equifax, the credit reference agency, Lending Works has scrutinised the repayment data of 2 million peer-to-peer personal loans written in the UK over the past five years. Findings show that even borrowers with higher than average credit scores have a one in ten chance of missing at least one repayment during their loan. The evidence also demonstrates that in the event of a major market downturn, it is likely that relying on a reserve fund alone would require a lender to reserve up to 5% of its loan book in order to protect all of its customers.

Since its launch in January 2014, Lending Works has provided market-leading security for lending customers, who have lent £3 million to borrowers across the UK.

The majority of Lending Works lenders are first-time peer-to-peer savers who say they are attracted to the platform by its savings protection and competitive interest rates. For the last 6 months, Lending Works has ranked either first or second of the consumer peer-to-peer lenders for the 5-year and the 3-year saving terms on all major comparison websites.

In response to strong demand from savers for the safest possible peer-to-peer lending environment without impacting potential interest gains, the company is increasing the insurance it puts in place at no extra cost to lenders or borrowers. The upgraded insurance offering is supplied by a consortium of three UK household name insurers, all regulated by the Financial Conduct Authority and Prudential Regulation Authority.

Nick Harding, founding CEO of Lending Works, commented:

“Action speaks louder than words. Instead of depending on the government to say the right things about regulation, it is our job to make customers feel confident about saving with us, and the Lending Works Shield goes a long way towards achieving this. We believe in the belt and braces approach to protecting customers’ money and are very happy to see that so many customers agree with us.

“Even as peer-to-peer lending becomes an ever more familiar feature of everyday consumer finance, it concerns us that some consumers still worry about how safe their money will be if they choose peer-to-peer over a bank’s savings account. Without action this is a stigma that we risk, as an industry, not being able to shake. 

“Interest from savers in peer-to-peer lending continues to soar. The amount saved on our platform has increased by over 30% every month since the summer and we lent almost £1 million in October.”

The advanced cover was facilitated by Protection Products Limited, the London-based brokerage chaired by Sir Edward Leigh MP, one of the longest-standing members of Parliament in the current government and former chairman of the UK’s Public Accounts Committee (2001-2010).

Sir Edward Leigh MP commented: “With FCA regulation in place and eligibility for ISA inclusion a near-term reality, the future looks bright for P2P lending. It is a fascinating time to be working with companies like Lending Works who are changing the face of modern consumer finance. Lending Works’ insurance-based protection goes further than most to prove that competitive savings interest rates needn’t come at the expense of security and assurance.”

Lending Works has just completed 10 months in operation and is now lending over £1m a month to borrowers. The company’s average borrowers are between 30 and 40 years old and typically borrow £4,200 for 36 months. Lenders are typically older and save an average of £6,000 for up to 5 years, earning an average 4.3% in annual interest over 3 years. Lenders committing to 5 years currently earn 6.0% per annum.

Both the arrears and default rate on loans provided by Lending Works are 0.00% and lenders can be confident that should the global derail again, they have the Shield protecting them.

The company recently appointed its first head of technology to drive IT platform development in line with the growing number of borrowers and lenders accessing its services.


Lending Works regularly canvasses borrowers and lenders for feedback. Case studies and introductions to customers are available upon request.

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