OF COURSE, this can make your skin peel. This is a retinol, for crying out loud! What did you expect? It's meant to promote skin turnover, therefore minimising pigmentation and sun damage and showing the younger and juicier cells. It also promotes collagen production, minimising fine lines, making the skin look plumper and firmer. Also, this ingredient, at this concentration, for this price is an absolute bargain.
BUT before any of this happens you may have the aforementioned peeling and irritation. This is a very high concentration of a very strong ingredient. In order to avoid or reduce those side effects, you have to build your way up. Start with 0.2 once a week AT NIGHT followed by an emollient cream to prevent dryness and ALWAYS use SPF in the morning. See how your skin reacts to that. If it's still strong, try every two weeks or less product or use the cream first until your skin adapts. If everything goes fine, try moving up to 0.5, once the previous bottle runs out. And repeat the same procedure until you can use 1%.