The so-called ‘Leeds Reforms’ were announced by Chancellor Rachel Reeves in the Yorkshire city today (15 July).
Other changes include reforming the bank ring-fencing regime and reducing regulation in the city in order to reintroduce ‘informed risk-taking’ to the financial system.
Major banks and financial firms including Barclays PLC, Lloyds, Vanguard, AJ Bell and Hargreaves Lansdown are backing a new consumer advertising campaign highlighting the benefits of investing. This will include banks “sending investment opportunities” to savers with cash in low-interest accounts.
Reeves also committed to ISA reform in the future – but the only change for now is the inclusion of long-term asset funds (LTAFs) in stocks and shares ISAs.
Tom Selby, AJ Bell’s director of public policy, said: “Today’s announcement from the Chancellor sends a clear message: we need to get Britain investing.
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“ISAs are clearly seen as a crucial route through which to get the public investing for the long-term, helping boost their household finances and support capital markets in the process.
“The devil is in the detail, however, and there still isn’t much of that to get stuck into. For months, rumours have suggested the Government may look to cut the cash ISA allowance in the hope that a whack-a-mole approach will see some of that excess cash pop up in stock market investments.
“Thankfully, that idea appears to have been shelved, at least for now. Instead, we need to start from scratch when it comes to ISA reform. ISAs are enormously popular, but over time, the landscape has become increasingly complex, with multiple different ISAs, each with their own rules and regulations.”
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “It’s incredibly positive to see Rachel Reeves take some key steps towards closing the UK’s yawning retail investment gap.
“There will be a new era of investment with the advent of new rules allowing companies to offer targeted support to their clients, alongside changes to risk warnings so they actively help retail investors understand their options rather than standing in their way of harnessing the incredible power of investment.
“Changes to the advice/guidance boundary will give them the understanding and confidence to realise the right balance of savings and investments for their needs, and take advantage of the huge potential that investment offers.”
