The Next Gen: Investors and Savers report from P2P lending platform ArchOver found that 61% of respondents acknowledged the prospect of higher returns and better interest rates from an IFIsa.

However, over half (57%) claimed that they still didn’t fully understand the service.

Unlike cash Isas, the money invested in an IFIsa is not protected under the Financial Services Compensation Scheme (FSCS).

Angus Dent, CEO at ArchOver (pictured above), highlighted that IFIsas were fundamentally different to cash Isas in the way they operated.

“Meeting investors’ expectations and making them feel secure at the same time will require ongoing education.

“Our research shows that nearly half (48%) of savers are nervous about losing their money, so the industry needs to communicate the benefits and safeguards clearly.

“The IFIsa gives you the freedom and flexibility to choose your own investment.

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“Investors must use that power to choose an option which combines the best elements of P2P lending: thorough due diligence, rigorous lender security and favourable returns.

“They must do their research to gain insight into the companies they’re investing in and should not ignore the job of diversifying their portfolio to balance out their risk.”

Over a quarter of those surveyed (26%) said that they were reassured by regulatory oversight such as the FCA’s recent approval of a number of P2P providers, including ArchOver.

“Although IFIsas have an associated risk like all investments, investors and savers can get a greater level [of] comfort by choosing a P2P platform that carries out stringent due diligence and credit analysis of all potential borrowers,” said Angus.

“Now is a crucial time for the sector to raise awareness around IFIsas and how they work.

“We must make sure that investors and savers have all the information they need when looking at IFIsa options.”