Innovative new way to earn investment income
Silver surfers are turning to an innovative new way to earn investment income, new research has found.
Trillion Fund, the renewable energy crowdfunding platform, has found that a third of all lenders to its peer-to-peer wind raises are over 61-years old, suggesting that the generation approaching or in retirement is not so old-fashioned about alternative investments.
Through peer-to-peer loans such as E5 Energy, Trillion Fund is giving investors a strong rate of return while also helping the UK to meet its clean energy goals.
The analysis of more than 300 lenders that have so far participated in loans to wind projects on the website revealed that 32 per cent of those lending are in or close to retirement.
The silver crowd is responsible for putting the most money into crowdfunds on the site. Almost half (49 per cent) of all funds raised come from this age group, although this is perhaps less surprising, given they have typically accumulated more in savings and investments than younger generations.
Older lenders are also more likely to invest higher sums. The average investment among the over 61s across two raises is £7,017.52, compared with £2,625 for younger lenders.
TheE5 Energy raise, which offers 7 per cent until April 30 on amounts over £50, has raised £1.05 million to date. So far, 34 per cent of these lenders are over 61, contributing 54 per cent of the total raised.
Julia Groves, chief executive of Trillion Fund, said: “You might expect crowdfunding to be the investment choice of a younger generation. But our research suggests that the silver pound, ever on the hunt for higher risk-adjusted returns than are available from traditional institutions, have ended up becoming the unlikely champions of crowd lending.
“Unlike equity crowdfunding, which is usually high risk, crowd lending is often lower down the risk curve, making it potentially palatable for even more cautious investors who are looking to diversify some of their investments.
“Peer-to-peer loans to renewable energy also offer alternative income, making them particularly attractive to older people who prefer income-based returns, rather than capital growth. We anticipate that new pension freedoms, allowing older people more choice, will mean more start to examine the merits of renewable energy.
“Wind and solar projects may also appeal to this demographic because they are tangible assets, producing something real and making revenue in an easily understandable way. We are finding that more and more older people are prepared to accept greater risk than they would face with a savings account for the potential higher returns from asset-backed lending to projects.”
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