An Isa with 8.24% fixed interest a year. Is that simply too good to be true?

It’s an advert that’s been popping up in many people’s Facebook newsfeeds during the last few weeks, for a “Platinum Isa” that pays a fixed 8.24% a year.

That’s certainly an eye-catching rate, and it prompted one of those who contacted Guardian Money to say: “It looks too good to be true.” There have also been discussions about the product on the forums of sites such as MoneySavingExpert.com, with one poster this month asking if anyone knew whether it was “legit”.

You can’t blame people for being wary in the wake of the scandal surrounding a different firm, London Capital & Finance (LC&F), which specialised in controversial “mini-bonds” and was advertising 2018-19 Isas paying 8% on sites such as Facebook.

LC&F crowed about how it was authorised and regulated by the main financial watchdog, and pulled in £237m from thousands of customers before collapsing a few weeks ago. Those investors look like getting as little as 20% of their money back. On top of that, HM Revenue & Customs now says the products offered by LC&F weren’t even qualifying Isa investments.

The company behind this new advert is called Improve My Isa, which has no connection to LC&F. However, when we looked at the ad and accompanying website, it wasn’t at all clear to us what type of Isa this was, or where your money would be invested.

When we asked a leading financial expert what he thought, he told us his advice would be to “stay away”.

However, Improve My Isa told us that “the claims in the advertisement are correct”, and that this product is a stocks and shares Isa which does not involve mini-bonds or peer-to-peer lending.

The advert states that “this Platinum Isa pays a FIXED 8.24% per year”, and adds that “the Security Trustee and Isa manager are authorised and regulated by the Financial Conduct Authority”.

The advert says the minimum investment is £5,000, and that it is a minimum three-year term.



The Improve My Isa Platinum offer appearing on Facebook newsfeeds

The Platinum Isa sounds very similar to an Isa that was being offered earlier this year by a firm called Astute Capital – this also paid 8.24% interest, required a minimum investment of £5,000, and had a three-year term. On one of its web pages, Astute Capital, which has an address in London’s Mayfair, said its Astute Isa was “a £500m publicly listed bond program”.

The Improve My Isa advert steers people to a website, improvemyisa.info. However, when we went to this site this week there was no mention on it of the 8.24% Isa – it only talked about its latest “UK Isa” paying a minimum 4.18% a year.

We found a separate Improve My Isa webpage that highlighted the 8.24% Platinum Isa. It stated that “all investments are asset backed” – though there were no details about what this meant.

At the foot of this page, it stated “some Isa products are investments and, as with all investments, capital may be at risk”. There was also a warning that “you may get back less than you invested”.

Shortly after Money spoke to Improve My Isa, the page featuring the 8.24% Isa was taken down. Click on it and it says: “The page you’re looking for is no longer available.”

We found another Improve My Isa website, improvemyisa.co.uk, which invited people to get in touch with the firm.

Money decided to show the advert and some of the other material to Yorkshire-based financial adviser Neil Liversidge. He says: “If you want an equity – ie, stocks and shares – Isa, you can get one from a big name firm like Fidelity or Invesco Perpetual or Schroders via a regulated independent financial adviser. If you do, then you’ll be covered by the Financial Services Compensation Scheme. If this is an equity Isa, why is it purporting to pay interest? Equities pay dividends, not interest.”

Liversidge, managing director of IFA firm West Riding Personal Financial Solutions, based in West Yorkshire, adds: “The fact they claim it’s an equity Isa but quote an interest rate is a red flag in itself. If this is a legitimate product, then it is being poorly marketed. All of this says to me ‘stay away’.”

Money emailed some questions to Improve My Isa. It told us it is a marketing and introduction company for various Isa providers. It said it does not carry out regulated activity, and is not required to be regulated by the FCA.

In response to Liversidge’s comments, it said: “The product is a retail bond which sits in a stocks and shares Isa. Certain stocks and shares Isas can include bond vehicles that pay interest as opposed to dividends.”

Retail bonds are different to mini-bonds. They are generally listed and are often less risky.

Asked what it would say to those who might suggest that a return of 8.24% appeared too good to be true, it said: “All investments carry a degree of risk, which is why an individual’s personal attitude to risk needs to be properly assessed and advice sought from an independent financial adviser.

“It is not the role of Improve My Isa to recommend any particular product, far less to advise on its suitability for any given individual.”

The spokesman told us the webpage featuring the 8.24% Isa was taken down “because it appeared there was confusion surrounding the product that was being advertised”.

One of the Improve My Isa webpages states that the site is a trading name of Global Property Markets, based in central London’s Old Street. Another that we found said it was a trading name of Global Property Marketing based in Barnet, north London. The company told us Improve My Isa is the trading name of Global Property Marketing.

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