There are growing calls for the government to remove stamp duty on UK shares and trusts. Many in the City believe this would drive up investments. If you are investment planning in Oswestry or Cheshire, a recent poll by Interactive Investor found that 75% of investors thought that abolishing stamp duty would incentivise capital inflow to the London market.
Whilst the Chancellor, Rachel Reeves, gave recently listed companies a three-year stamp duty ‘holiday’ in the last Budget, many people feel she should go further, in order to disincentivise investors from looking abroad, particularly to the lightly regulated US. Despite this, Britain continues to reign as the most popular region to invest in, with 37% of investors focusing on the UK market compared to 17% looking across the water.
Investors have also been considering emerging markets in areas such as Asia, and tech opportunities outside the ‘AI bubble’. There remains lingering uncertainty about the impact of geopolitical tensions on investment portfolios, with 44% of those asked expressing some concern. This issue has leapfrogged previous areas of disquiet such as tariffs and trade wars, whilst other investors have cited the UK economy, ‘fiscal drag’, dividend tax increases and changes to the ISA allowance as obstacles to their strategies.
The evidence, thus far, indicates that UK retail investors have held their nerve, keeping an eye on the long term. Last year, nearly 50% of investors maintained their strategy, whilst just over 25% opted to invest more. Time will tell whether a similar picture unfolds this year or whether external factors blow investment strategies off course.
