Personal Finance

Sayonara, RateSetter. How long does it take to get your money back?

A quick review of my experiences with RateSetter. Did I make any money? Did I lose any money? And how easy was it to get my money back?


A reminder that I am not a financial adviser! As always, do your own research.

This is not an advert and does not contain any affiliate links (although, as described below, you are welcome to contact me for such a link if you’re interested). The main purpose of this article is simply to illustrate my experiences with RateSetter as of January 2020.

Update – May 2020 – Ratesetter is suddenly no longer as liquid as it once was. I have added an update at the bottom of the article.


What is RateSetter?

It’s a peer-to-peer investment platform. You give RateSetter your money and choose one of three products that returns either 3.0, 3.5 or 4.0% interest. RateSetter then act as a middle man, lending that money to businesses and households.


My experience

A little over a year ago, I saw that they were advertising a bonus for new joiners. Invest £1000 for at least one year and receive a £100 bonus after the time was up. And that was on top of the advertised 3-4% interest rate.

In short, invest £1000 and receive around £140 twelve months later, for an effective interest rate of 14%? Sign me up!


Is my money safe?

I’ll admit, I was a little dubious at first. I had read a lot of negative stories about people losing their money in P2P investments, but I eventually decided to give it a go and I’m happy to say that I never lost any money.

RateSetter has a ‘provison fund,’ which supposedly will act to protect investors from individuals who take a loan but then cannot pay it back. The company also claims that no one has ever lost any money investing with RateSetter.

However, I have seen reports recently that this provision fund may be starting to run low.


How long did it take to receive the money?

In order to qualify for the £100 bonus, I needed to have £1000 invested for 12 months.

Once I reached this milestone, I received the bonus after one week.

At this point I decided that, despite the success I had had with RateSetter so far, I wanted my money back. One year ago I was happy to risk £1000 for a 14% return. However, I’m not quite so happy to risk ~£1200 for only a 3% return. Also, as I mentioned in the last income report, I have two big expenses coming up, so now I want that money to be safe and easily accessible!

Selling all of my loans was very quick and easy. In less than 24 hours I no longer had any money invested, and it was all sat in the account as cash. I then withdrew all of the money into the same bank account that I deposited it from a little over a year ago. The money was back in said account the next working day.


Is the introductory offer still active?

The refer-a-friend scheme is still active, which pays the referrer £50 and the referee £100 if they invest £1000 for a year, as I described above. If anyone is interested, feel free to drop me a message and I’ll share my code. If you can’t be bothered to message, there are plenty of other UK bloggers around with their own referral code easily accessible on their website.


So why aren’t I investing in RateSetter anymore?

Despite me mentioning the referral scheme above, bear in mind that I have decided that P2P is no longer for me! I’m not particularly impressed by the fairly low rates of return and potentially high risk. Looking elsewhere, you can get 3% on up to £1500 from TSB or 1.35% on up to ~£80,000 with Goldman Sachs’ Marcus account, with no risk whatsoever. And of course, I’m still investing into the standard global index tracker in my Vanguard Stocks and Shares ISA.



So, there you go! I had a great run with RateSetter earning about £150 over the course of 12 months with a £1000 investment. Even better, I received that money back into my bank account with no hassle. However, my circumstances have changed and I will need that money in the next few months, so I have chosen not to continue my foray into P2P.


Update – May 2020

This all suddenly feels somewhat prescient, but also out of date! Ratesetter has halved payouts to investors and withdrawals are suddenly taking much longer as a result of the coronavirus pandemic. Whereas I was able to cancel my investment and receive my money immediately at the beginning of the year, investors are now having to wait at least 8 weeks. The most recent update from Ratesetter (on the 8th of May) stated the following:

We are currently delivering release requests made on 12th March in Access, Plus and Max, and we are delivering requests made on 16th March in the 1 Year market and 17th March in the 5 Year market. We are continuing to process requests on a chronological basis within our different markets.

It looks like all P2P is struggling right now. I think it makes sense to avoid any new investments in Ratesetter et al, and cross your fingers that any current investments survive.

6 replies on “Sayonara, RateSetter. How long does it take to get your money back?”


Interesting write up. I’ve only got a few quid left in my Ratesetter account and also a bit in Funding Circle. Over the years, including two referrals of £50 each, I think I made around 12% with Ratesetter (overall 7-8% across all P2P though), which wasn’t too bad. I don’t have anything bad to say about P2P either, except to say that I decided that P2P wasn’t for me any more. Money I’ve withdrawn from my P2P has gone straight into my ISA.

Thanks for commenting, Weenie. Agreed, I decided that P2P was merely serving to over-diversify my money. I’d rather keep things simple going forward.

Hey thanks for the write-up Doc. To be honest I am also looking forward to getting the reward and leave the platform. I have to say that I love the way they have structured the business model and the transparency with their provision fund, but when I outweigh the risks against the returns I believe it isn’t worth it. Management, employer’s wages and FCA regulation fees are expensive In this country and that must cuts investors yields I believe.

Fair point about FCA regulation eating into yields for investors. However, I would rather have that than the situations I have read about with Envestio, etc! Goes to show that regulation is very necessary, otherwise people will start taking advantage of others.

Total provisions fund payments made is 185.7M against a total amount lent of 3,753.2M … so 4.9% of lending

Current fund is 9.3M with expected inflows of 25.4M, so a total of 34.8M. Balance this against the current under management of 860.9M gives a reserve for 4%.

So less than the historic payments made.

But higher risk loans were made in the early days and now there is a bit more vetting.

The really surprising figure for me is te Total interest paid is 158.4M .. 15% less than the provisions fund payments ….. rather lower than I thought !!

I have however used Ratesetter of many years and although the returns are lower, it is still a valuable fairly liquid store of working cash.

I do think your article is interesting, but really don’t see the same risk as you do. Even if the provision fund ran out, all that would happen would be a slightly lower return for a perion .. in the long term not a big deal

That is some useful analysis, thanks for sharing!

You could argue that I have overreacted, but as I said in the main text, I need that money now! I may revisit RateSetter after my wedding and visa application are out of the way, and I don’t have any big expenses coming up. For now, however, I’ll be sticking with my S&S ISA (he says, as markets are crumbling around him!) and keeping the money I need imminently in cash.

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