The city companies urge Rachel Reeves to stop cash

Unlock the editor’s summary for free

Roula Khalaf, editor of the FT, selects her favorite stories in this weekly newsletter.

Big City companies are urging Rachel Reeves to climb the exemptions of cash taxes for ISAS, a form of savings loved by millions of British, in an effort to boost the financial services of the United Kingdom and the economy by channeling money in Actions.

Companies, including the Insurance Group, Phoenix and the London Stock Bangic Group, told the Chancellor that almost £ 300 billion in cash ISAS could generate better yields for savers if they are invested in actions and actions, while supporting the market of decreased actions of the city.

A main banker said that the problem had been raised by several finance executives at a recent meeting with Reeves and had not rejected the idea.

“The State should not give a tax exemption so that we all are our cash,” said Andy Briggs, executive director of Phoenix, which operates the Standard Life brand.

“I have hope that Rachel Reeves concludes that it makes sense to reemain Isa’s tax incentives to make them consistent with the Government’s very welcome growth agenda,” added Briggs, who was at the meeting.

Download the cash ISA would be the biggest shaking of the savings market, since the products were first introduced by the then Chancellor Labor Gordon Brown in 1999.

Cash ISAS allows savers to win tax -free interest in up to £ 20,000 per year and are, with much, the most popular isas in the United Kingdom. Surveys show that many British prefer to maintain cash wealth instead of investing in the stock market because they see it as safer.

A treasure officer pressed about discarding the cash ISA of the city’s companies said: “They also like the idea that it could provide growth for their asset management weapons. They say there is a lot of capital that could be doing much more. ”

People close to discussions said Reeves would be reluctant to change a popular form of savings, but the idea has not been ruled out.

“They are quite important products for many people, so changing the effective isas would be a big problem,” said another official.

The United Kingdom offers several different ISAs, including a product for cash and another for actions and actions.

But the financial services industry has expressed concern that the effective ISAS is in money accommodation that could be earning more in the companies that are quoted in London while supporting the capital markets of the United Kingdom. Banks obtain rates by helping companies sell shares to retail and institutional investors, while assets administrators have suffered in recent years of investors that extract money from their capital funds from the United Kingdom.

Steven Fine, Executive Director of the Peel Hunt Investment Bank, told the FT that he had “constantly been in contact” with the Treasury about Isa’s reform, “ideally limit or eliminate cash, with the balance on actions and actions that quote on London”.

Another banker said that the government could limit the amount of cash held within an ISA, for example, up to £ 5,000, while the remaining and major portion could be maintained in actions and actions.

The president of an asset manager of the United Kingdom said that the industry has been asking for an ISA reform, pointing out that there should be “a single ISA, encouraging people to have assigned more to British actions and actions.”

The treasure said: “We want to help people save for their future objectives and develop greater financial resistance throughout the country. We maintain all aspects of savings policy under review. “

According to an LSE spokesman, the group was not at the meeting with Reeves, where the ISAS issue was discussed.

Around 14 million ISA headlines of 22 million dollars from the United Kingdom were only in Cash ISAS, according to the analysis of the most recent data of HM Inform & Customs, of 2021-22, by AJ Bell, a financial platform. Inverters of 4.2 million hours only had ISAS actions and shares and 3.6mn had cash accounts and shares and shares.

Of the £ 726 billion held in adult isas, £ 431 billion remain in actions and actions and the rest is in cash, according to the AJ Bell analysis of the HMRC data for 2022-23.