Call for simplified ISAs to boost UK equities

If you are considering your options for investment management in Cheshire, it may be worth reading what the largest investment sites in the UK have been saying to the government.

This is in regard to the savings market and domestic equities. The investment management industry provides services including mutual funds, pension management and fund platforms to private and institutional investors. Many of its leaders have been urging the governments to rethink Individual Savings Accounts (ISAs), as their complexity is currently perceived as damaging to confidence and acting as a barrier to entry.

Current ISA products were criticised for offering too many options, thus leaving investors confused and less incentivised. As it stands, cash ISAs enable people to save cash without being hit by income tax on interest, while stocks and shares ISAs protect investors from income tax on dividends and capital gains tax on sold shares.

One broker AJ Bell announced that it had written to the Treasury advocating tax breaks for UK stocks and simplification of ISAs. It proposed combining them together, along with stocks and shares ISAs and junior ISAs. It added that the overall ISA allowance should be increased from £20,000 to 25,000.

According to HM Revenue & Customs research, 3 million people have in excess of £20,000 in cash savings, but zero in stocks and shares. As such, savers could potentially gain while supporting UK equities if they invested some of these assets in shares. Investment sites have said that eliminating stamp duty could also help create another incentive to buy British shares.

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