The government is understood to have dropped plans for a “British ISA”.
The ISA (individual savings account) was originally conceived by their predecessors with the intention of channelling savers’ money into London-listed stocks.
The new government’s reasoning is that it would unnecessarily ‘complicate’ the investment market for individuals. The proposed ISA product would have authorised an extra £5,000 but only for UK-listed equities.
If you are considering asset management in Cheshire, British stocks have been impacted in recent years. This has largely been due to investors going for global shares, as pension funds have reduced their exposure to UK stocks and refocused investments on global equities, in pursuit of more rewarding returns. Recent data from the Investment Association reveals that retail investors have withdrawn about £54 billion since 2016.
The Treasury are insisting that a final decision has not yet been reached, stressing that the government will flesh out its ISA plans at a later stage.
For their part, leading investment sites have said that making the product too complicated could deter people from making full use of these tax-free accounts. Instead, they have called for simplification of ISAs and are urging a more pragmatic long-term approach.
Cash ISAs currently enable savers to avoid incurring income tax on interest, while investors with stocks and shares ISAs are not subject to capital gains tax and dividend income tax in the sale of shares.
While the Chancellor of the Exchequer Rachel Reeves has outlined proposals to drive more pension money into a broader range of UK assets, investment sites believe the government could go further, simplifying financial options to prevent savers feeling overwhelmed.
