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British Chancellor Rachel Reeves will probably announce plans to cut the annual tax-free cash allowance in her speech in the manor house next month to shift some of the 300 billion GBP in British companies.
Government officers said that Reeves planned to set an annual limit for cash isas at a lower level than the current upper limit of 20,000 GBP per year for the amount that British savers can protect against taxes on individual savings accounts.
The Chancellor has previously promised not to reduce the total amount that the public can invest tax -free every year, for example in stocks and stocks, but it has not ruled out that a lower upper limit for money will be brought into bar Isas.
Reeves believes that the plan will create a number of new investments in companies with London companies that increase the stock market by encouraging savers to switch to shares, according to the officers. They said that an announcement was most likely in Reeves’ man’s house speech on July 15th.
The move would mark the greatest overhaul of the ISA regime since its entry into force in 1999 under the then Chancellor Gordon Brown. It happens that the London stock market suffers from a drought of corporate flotation and as investors pull their money from British equity funds.
The problem was the subject of a violent lobbying between city companies to limit cash -isas such as broker, investment banks and asset managers and companies such as Building companies that use cash savings Finance loans.
At the beginning of this year, the government discussed the reduction of the threshold for the ISA’s cash element to just £ 5,000, according to the city numbers.
A Whitehall figure familiar with the negotiations, however, said that the ministers listened to counter lobbying in order to keep the threshold higher. Discussions still take place over the exact level that the government would choose, added.
Cash is the most popular of the four main -ISA products, including a stock and stock product as well as two other niche versions that relate to alternative investments and savings for buying a house.
Reeves said: “I want people to bring their savings back better, regardless of whether this is in a pension or in their daily savings.” She added that she would not reduce the ISA border of 20,000 pounds “, but did not rule out the allowance for cash -isas in particular.
An official of the Ministry of Finance confirmed that the government was “examining the options for reforms to Isas, which received the balance between cash and stocks”.
Although investments tend to do so exceed cash In the long term, consumer groups and construction companies have argued that the limitation of cash would not necessarily change the financial habits of people, and warned that it would be difficult to ensure that the cash flows in shares in London are listed.
“Not everyone is in a position in which they have excess money to invest,” said Susan Allen, Managing Director of Yorkshire Building Society. “In many cases, our customers keep cash to pay for life events such as a wedding or a move.”
An industry expert said: “What is fully concentrated (the Ministry of Finance) – I would say I would say – is the cash page because there is almost half a trillion cash that could be inserted into Business. “”
The plans are expected to be determined in the “Financial Service Guardian and Competition Strategy”, which Reeves published together with their speech of the manor house.
Another financial service expert said that the Ministry of Finance was usually not consulted with ISA allowances, but would probably consult the industry about the “mechanics” of changes to Isas.
The new policy of Financial Conduct Authority to provide “targeted support” to support savings in the investment will also be part of your speech.
The ministers also consider to allow long -term asset funds within ISAS, so that investors can access private markets such as the infrastructure within a tax -efficient wrapper, according to a financial service manager. Government officers refused to comment on this possibility.
