Chancellor Rachel Reeves has laid out her vision for the future of financial services—and while there was plenty of buzz beforehand about possible changes to the ISA regime, nothing materialised on that front. Instead, the focus was on encouraging more people to move their money out of cash and into investments, with plans to let banks nudge customers towards stocks and shares and a refresh of FCA risk warnings on the way.
It’s a clear signal that the government wants to get more people investing—but where does that leave advisers? With clients likely to be hearing more from banks and seeing more pro-investment messaging, there’s an opportunity to step in with proper advice and planning. The industry has already started to react:
James Tothill, Investment Specialist at Wesleyan, said: “The Chancellor’s plans to encourage investment while providing the support people need to make informed decisions are welcome.
“While this isn’t about regulated advice in the traditional sense, many of the same consumer needs apply – clarity, confidence, and a route to make informed decisions. Advisers and providers alike have a role to play in helping individuals feel more comfortable taking their first steps into investing.
“The Targeted Support regime help savers to consider investing and suggest an appropriate investment product. Anything that empowers consumers to make better financial decisions is a positive step, and now the industry must consider how to best implement the proposals at scale to deliver better outcomes for customers.
“Further changes to ISA rules will have a significant bearing on savers and retail investors, and we look forward to hearing more from the Government on this in due course.”
Keith Phillips, Chief Executive, The Platforms Association: “We welcome today’s Mansion House speech and the publication of the Financial Services Competitiveness & Growth Strategy. Investment platforms play a crucial role in building and encouraging a strong retail investment culture. The UK investment platforms sectorhas grown exponentially over the past twenty years with almost £1.4trn assets under administration and is a real success story for UK financial services.
While the risk appetite of every investor is different with cash savings playing an important role for savers young and old, we support the Government’s ambition to encourage long-term saving and understanding how people’s savings and investments are being deployed. The proposed ‘Tell Sid’ campaign will be a helpful reminder and starting point for many new investors.
The recently published FCA targeted support reform is a step change in improving advice and guidance for retail investors and structural changes to the Innovative Finance ISA will allow investors to access other long term investment options.”
Alex Ranahan, tax analyst at FSL comments:
“The government has made it clear that they’d like to turn the UK into a nation of investors, but its tax system doesn’t seem to have kept pace with its plans. Savers currently benefit from exemptions and the mandatory submission of data on interest and ISA records. Investors, on the other hand, are required to self-assess, a complex and time-consuming task with a low margin for error.
With exemptions shrinking, more people are likely to be pulled into this complex world. I’d encourage the government to accelerate their plans to collect data on investments, such as dividends, to avoid disadvantaging would-be investors.”
Commenting on the Chancellor’s Leeds reforms, Claire Exley, head of guidance and advice at J.P. Morgan owned digital wealth manager Nutmeg, said:
“Building on the FCA’s recent decision to improve targeted support for financial guidance, we welcome the Government’s ambition to unlock greater retail investment participation in the UK.
The pandemic saw a wave of new investors in the UK, but still too few Brits see investing as a way to grow their money responsibly over the long-term. A recent study1 by J.P. Morgan showed that UK households preferred cash savings accounts over stock market investments as the best long-term investment for their money. This decision not only leads to inflation eroding the purchasing power of UK household savings over time but also limits the opportunity for consumers to find higher returns that can lead to a better quality of life.
Breaking this cycle by kickstarting an investing culture in the UK through improved financial education is the right course of action. You only have to look at the U.S., where retail investing is deeply ingrained in society and channels billions of dollars into businesses and industries each year. Done right, this UK campaign could boost financial literacy and unlock a new generation of investors, enabling more people to achieve their financial goals while pushing greater investment into UK capital markets.”
Carol Knight, Chief Executive of The Investing and Saving Alliance, said:
“Savers across the UK can breathe a sigh of relief that the Chancellor has not proceeded with reducing the Cash ISA allowance. Rather than cutting the tax benefit of Cash ISAs to try and push people into investing in stocks and shares, it’s right that the Government appears to be heeding calls to encourage people to invest with better support, information and guidance.”
Royal London’s director of policy Jamie Jenkins says:
“The Chancellor’s speech marks a welcome shift in the Government’s rhetoric from the stick of mandating investment in UK markets to more of a carrot. The initiatives announced will help people engage with the long-term benefits of investing their savings, while contributing to growth in the economy.”
Brian Byrnes, Head of Personal Finance at Moneybox comments: “The Chancellor is wise to take a measured approach towards ISA reforms. We recognise this is a complex area and welcome the opportunity for meaningful consultation.
After many months of speculation, Cash ISA savers have been left feeling anxious about the future of one of the most popular and trusted savings accounts. In a recent Moneybox survey, 51% of Cash ISA savers were worried or confused about the potential impact that cutting the Cash ISA tax free allowance would have on their ability to build financial security. 6 in 10 believed it would unfairly penalise cautious savers and 92% were adamant that the Government should not make changes to long-standing trusted saving products without first consulting with those who use them.
We fully support the Government’s ambition to foster a stronger investment culture in the UK and while our research shows that there is an appetite to invest amongst most savers, people are held back by fear of financial loss, a lack of confidence and limited knowledge.
Cash ISAs are not, and never have been, a blocker to investing—they’re a gateway. Initiatives like the Advice Guidance Boundary Review, the Pensions Investment Review, easing overly cautious risk warning regulations along with consumer education campaigns will all be key to breaking down the barriers and building a nation of confident investors.”
Sarah Brown, Principal and Senior Actuary, Gallagher said:
“The UK’s network of pensions schemes – many of which are now in a comfortable surplus – has emerged as an unsung success story for the cohort of workers who had access to such a scheme. It makes sense that the government would be keen to leverage the considerable investment power that has accumulated in those schemes and use it to fund its wider economic policies. If successful, a UK pensions megafund, composed from both DC schemes and Local Government Pension scheme pools, could amount to at least £25bn in assets by 2030.
“However, a mandate for schemes to invest in UK assets may alienate trustees. Only 30% of public sector DB schemes are invested in the UK, and that figure is even lower for DC schemes – around 20% are invested in the UK compared to 50% in 2014. However, trustees must allow for the membership’s best interests, and some trustees may not be willing to funnel assets into a UK-based investment to appease the Chancellor. Retirement security is a pressing concern for millions of people, and members will need reassurance that trustees are considering every investment option – regardless of geographical location.”
Ruth Handcock, CEO, Octopus Money:
“We’re delighted to see the Chancellor putting financial advice and investing confidence firmly on the UK’s agenda. For too long, investing has been overlooked by most people in the UK. That’s slowly starting to change, thanks in part to initiatives like auto-enrolment, but the reality is that many people still don’t invest – and 91% have never had access to personalised money advice.
Done well, these initiatives could help people feel more confident about how much to keep in cash, how much they can afford to invest, and crucially, understand not just the risks of investing – but the risks of doing nothing.
While the AGBR is a positive move, it remains focused on products and not on planning. What we need sitting alongside targeted support to give people the confidence to invest is affordable, personalised, human-supported advice – made accessible through technology – to help people build financial plans that reflect their lives, their goals and their worries.
At Octopus Money, that’s exactly what we’re working to deliver. By combining smart technology with expert human coaching, we’re giving people personalised, practical plans – whether they have £1,000 or £100,000. With the right tools, and this renewed government focus, we’re optimistic about seeing a future where thousands more people feel confident, informed and in control of their financial future.
Octopus Money has also supported the UK Investment Campaign to encourage greater retail investment in the UK.”
Mark FitzPatrick, Chief Executive Officer of St. James’s Place, says: “St. James’s Place warmly welcomes the Leeds Reforms announced by the Chancellor to make the UK a more attractive location to invest and to help foster a stronger culture of investing. We are pleased to see progress being made to make the regulatory system more predictable, such as the plans to return the FOS to its original purpose as a simple, impartial dispute resolution service.
:We strongly support the planned UK Investment Campaign announced yesterday, joining colleagues across the industry to develop a campaign that encourages the nation to invest. Building a culture of investing is vital – not just for people’s long-term financial wellbeing, but for the wider economy. With better awareness we can help more people feel confident about investing and nurture a stronger investment culture. This work complements developments with the Advice Guidance Boundary Review and we continue to work closely with Government and FCA to ensure that targeted support is designed in the right way.”
Colin Lawson, founder and managing partner of Equilibrium Financial Planning, warns that loosening risk warnings and flooding people with “helpful” bank messages could lead to unintended consequences, from poor investment decisions to a rise in scams targeting new investors.
Here’s his take: “Encouraging savers to put more into stock markets could help their money work harder over the long term, but it risks oversimplifying a complex decision. Without proper advice, many could take on risks they’re not prepared for such as investment scams, and loosening risk warnings only heightens that danger. The government’s push shouldn’t replace thoughtful, personalised financial planning and speaking with a qualified planner.”
Tony Dalwood, CEO, Gresham House comments:
These reforms are a continuation of the intent to revitalise UK capital markets and unlock long-term capital – but success will be on structural and material changes actually implemented.
Pension consolidation and initiatives like PISCES and the Leeds Reforms are welcome steps but a clear route for primary capital to reach sub-£50m projects remains missing – especially in infrastructure, the energy transition and regional growth. Structural supply side changes are needed and corporation tax reform has shown it can help capital markets scale and government revenues.
Alongside that, specialist managers stand ready to deploy.”
Commenting on the announced plans, Bruce Cartwright CA, CEO of the Institute of Chartered Accountants of Scotland (ICAS), said:
“A renewed emphasis on unlocking growth and investment is essential, and it was encouraging to hear the Chancellor express a commitment to improving regulation. But economic growth can’t come at the expense of good governance, transparency, or public trust. If the UK is serious about becoming a destination for long-term, responsible capital, it must urgently act on three fronts: deliver growth that genuinely attracts sustainable investment, safeguard the environment in its broadest sense, and strengthen protection of consumers and the wider public interest.
We’ve long called for a smarter, more proportionate regulatory approach. Reform must also mean resilience, as a strong economy demands strong governance.
Regulation should not be seen as a barrier to growth, but as the framework that supports it by providing the public and investors with greater confidence that the UK is a safe place to do business. With that in mind, some of the Chancellor’s language concerns us. Describing regulation as the ‘boot on the neck’ of businesses or of ‘choking off’ enterprise and innovation risks undermining the very trust and stability that sustainable growth depends on.
The Chancellor’s decision to not proceed with a UK Green Taxonomy is also disappointing. We hope this rollback is not a sign of a similar watering down on the manifesto commitment to mandate transition planning for certain entities. However, we welcome the UK government’s ambition to deliver a world-leading sustainable finance framework to support the UK’s position as the sustainable finance capital of the world. We hope that this leads to a focus of resources on other policies which will support these objectives.”
