Unlock the publisher’s digest free
Roula Khalaf, editor -in -chief of the FT, selects her favorite stories in this weekly newsletter.
Large cities companies urged Rachel Reeves to reduce tax loss for cash ISAS, a form of savings well by millions of British, in order to stimulate British financial services and the economy by channeling the Money in actions.
Companies, including the insurance group, Phoenix and the London Stock Exchange Group told the Chancellor that nearly 300 billion pounds in cash in Isas could generate better yields for savers if they were invested in shares and actions, while supporting the city’s decline market.
A principal banker said that the question had been raised by several finance leaders at a recent meeting with Reeves and that she had not rejected the idea.
“The state should not give tax relief for all of us to park our money in cash,” said Andy Briggs, Managing Director of Phoenix, who exploits the standard life mark.
“I hope Rachel Reeves will conclude that it is logical to refocus the ISA tax incentives to make them conform to the government’s very welcome growth agenda,” added Briggs, who was in the meeting.
The abolition of cash Isa would be the greatest upheaval of the savings market since the products were introduced by the Chancellor of the time, Gordon Brown, in 1999.
The ISAS Cash allow savers to win interest in tax franchise on a maximum of £ 20,000 per year and are by far the most popular ISA in the United Kingdom. Surveys show that many British prefer to keep the richness in cash rather than investing in the stock market because they consider it safer.
A Treasury official has put pressure on the abolition of ISA from Cash by City companies, said: “They also like the idea that this could provide growth to their asset management weapons. They say there is a huge amount of capital that could do much more. »»
People close to discussions said Reeves would be reluctant to change a form of popular savings, but the idea has not been excluded.
“These are products important enough for many people, so changing the ISAS cash would be quite important,” said another manager.
The United Kingdom offers several different ISAs, including a product for money and another for actions and actions
But the financial services sector has raised concerns that ISAs de Cash are funds that could gain more in london companies while supporting the capital markets of the United Kingdom. Banks are paying costs by helping businesses to sell stocks to retail and institutional investors, while asset managers have suffered investors from their capital funds in the Kingdom in recent years- United.
Steven Fine, CEO of Investment Bank Peel Hunt, told FT that he had “constantly been in contact” with the Treasury of the ISA reform, “ideally to limit or delete money, with the balance in the actions and actions listed in London ”.
Another banker said that the government could limit the amount of the money held in an ISA, for example up to £ 5,000, while the greatest remaining portion could be held in shares and shares.
The president of a British asset manager said that industry called for ISA reform, noting that there should be “one Isa, encouraging people to have more allocation in actions and British actions ”.
The treasure said: “We want to help people save their future goals and build greater financial resilience across the country. We keep all aspects of the current savings policy. »»
According to a spokesperson for LSEG, the group was not in Reunion with Reeves where the subject of the Isas was discussed.
About 14 million of 22 million ISAs from the United Kingdom held ISA in cash alone, according to the analysis of the latest income & custom HM data from 2021-222222, by AJ Bell, a financial platform. Some investors of 4.2 million held only ISA shares and shares and 3.6 million people had both in cash and in shares and in shares.
Of the 726 billion sterling books held in ISAS for adults, 431 billion sterling books are held in shares and actions and the rest is in cash ISAS, according to the AJ Bell analysis of HMRC data for 2022-23.
