42% of homeowners surveyed who have not invested on a peer-to-peer platform had chosen not to because of the risk involved, a survey of over 2,000 homeowners by YouGov for Lindsay has found.

Younger generations however are more open to risk, with just 28% of those aged 25-34 citing risk as a factor for not investing in peer-to-peer, compared to 46% of 55 and overs.

Peer-to-peer lending is also being held back by a lack of awareness among potential investors, with 22% of respondents saying they had not heard of it before. In addition, 17% did not know how peer-to-peer lenders worked.

Yet despite concerns over risk and the lack of awareness, 5% of homeowners surveyed had invested through peer-to-peer platforms.

30% of those homeowners who do use peer-to-peer platforms invested moderate amounts of £1,000 or less. However at the opposite end of the spectrum, 18% invested larger sums of over £5,000.

Investment in peer-to-peer finance appears to be divided into consumers trying out platforms with small amounts of cash invested, and those who regularly invest larger sums.

John Goodall, cofounder and CEO of Landbay, said: “At Landbay we’ve gone out of our way to be open and up front about the risks involved on our platform, but we’re equally open about the unique range of protections our model offers. We’ve based our proposition around creating the most risk-proof peer-to-peer platform, in an industry sometimes reluctant to mention the R word.

“These research findings highlight the need to debate the merits of risk more in financial planning. We need an open and proper discussion on whether more people should consider moving a small proportion of their savings into an investment. Of course risk is not for everyone, but it appears too many hoard large amounts of money in cash savings when it might be wise to consider putting a small amount of those savings at risk in exchange for better returns as part of a balanced approach.

“The question is whether too many people see it as a binary choice between keeping all their money safe in the bank or putting it all at risk. Instead it should be about finding the right balance to achieve what you want to with your hard earned cash.”