Investor guide

P2P Investing During Inflation: Real Returns, Opportunities and Risks

A higher nominal return may limit the loss of purchasing power, but P2P investing is not an automatic inflation hedge. Results depend on arrears, losses, fees, taxes and idle cash.

Published: 5 February 2026 · Updated: 24 July 2026 · Author: P2P Investitor

P2P investing and inflation
Key points
  • Compare inflation with net real returns, not an advertised rate.
  • Buyback is a contractual commitment, not a capital guarantee.
  • Short maturities improve adaptability but do not remove credit or liquidity risk.
  • P2P should normally be only one part of a diversified portfolio.

How inflation affects investments

Inflation measures changes in consumer prices. The Harmonised Index of Consumer Prices supports comparison across EU countries, while each investor's personal inflation rate can differ according to spending. When prices rise faster than net returns, capital loses purchasing power.

Simplified guide

real return ≈ nominal return − inflation − fees − taxes − credit losses

A 9% nominal return with 4% inflation does not automatically equal a 5% real profit. Arrears, losses, tax treatment and cash drag must also be included.

Can P2P help during inflation?

Potentially, but only when the realised net return exceeds inflation. P2P loans may generate more current income than cash, but investors accept credit, platform and liquidity risk in exchange. Interest is compensation for risk, not free protection.

When the approach is more resilient

  • exposure is spread across more than one platform and independent lending company;
  • maturities match liquidity needs;
  • originator finances and arrears are monitored;
  • returns are measured using XIRR after costs;
  • an emergency fund is held outside P2P.

Five risks inflation does not remove

  1. Credit risk: a borrower or lending company may default.
  2. Platform risk: operational failure, fraud or insolvency may disrupt servicing.
  3. Liquidity risk: a secondary market or early withdrawal may be unavailable when needed.
  4. Concentration risk: many loans can depend on one corporate group.
  5. Currency risk: exchange-rate movements and conversion costs can reduce returns.
Buyback does not mean guaranteed protection

Buyback works only while the responsible lending company has the resources to honour it. During financial distress, the promise may not be fulfilled in full or on time.

A practical process for investors

  1. Define how much capital can remain locked without affecting the emergency fund.
  2. Compare regulation, transparency, reporting, liquidity and concentration.
  3. Start with a small amount and monitor payments, arrears and idle cash.
  4. Calculate net returns after fees and taxes, then compare them with a relevant official inflation indicator.
  5. Review periodically without constantly chasing the highest rate.

P2P compared with other assets

No allocation is suitable for everyone. Deposits provide different liquidity and protection, bonds carry interest-rate and credit risk, global ETFs have market volatility, and property requires more capital and management. P2P may complement these assets but is not an automatic replacement.

For more detail, see P2P vs ETFs and deposits and the main risks of P2P investing.

Sources and methodology

Assess platforms beyond advertised returns

Compare risk, regulation, transparency and liquidity using a consistent editorial methodology.

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