City companies call on Rachel Reeves to reduce tax benefits for millions of small investors in Cash Isa's in the hope of stimulating the British economy.
Financial companies have told the Chancellor that the £ 300 billion that British possesses in cash in cash could yield a better return for savers if they opted for more risky shares and shares ISAs, while also stimulating companies.
Isa's have brought about a revolution in the savings market since they were introduced by Gordon Brown in 1999. The last figures show that 12.4 million adults were registered for an ISA in 2022/23, a large increase compared to the 11.8 million the previous year.
This increase was driven by people who brought more in cash Isa's, where the amount saved increased by £ 10.7 billion.
The subject would have been discussed during a recent meeting between financial managers and Reeves, who did not have rejected the idea, according to a senior banker.
Andy Briggs, CEO of Insurance Group Phoenix, was also during the meeting and told the Financial Times: “It is not the role of the state to offer tax benefits for simply money in cash.”
He added: “I hope that Rachel Reeves will see the feeling when reorienting Isa -tax stimuli to adapt to the wider economic growth strategy of the government.”
Due to a perception of greater safety, many British are preferable to their money in cash in contrast to investing in stocks and in cash Isa's, savers allow tax-free interest rates at a maximum of £ 20,000 a year.
Rachel Reeves has been encouraged to reduce tax benefits for millions of small investors in Cash Isa's to stimulate the economy
Isa's have brought about a revolution in the savings market since they were introduced in 1999 by Gordon Brown (file photo)
The United Kingdom offers various types of ISAs, but the financial services are concerned that too much money is led to cash deposits when it could be more productive if it were invested in British companies.
One treasury civil servant was lobbyed on the scrapping of cash -disases by city companies said, “They say there is a huge amount of capital that could do much more.”
But although the possibility is still being considered, Reeves is considered cautious to change such a widely used form of savings.
A spokesperson for the Treasury said: 'We want to help people save for their future goals. We keep all aspects of savings policy assessed. '
