Plans for the ‘Great British ISA’ have been shelved before they were hatched, sadly.
The idea was unveiled in the previous Government’s final Budget (as it turned out) earlier this year by the then-Chancellor Jeremy Hunt.
The scheme would have allowed savers to invest an extra £5,000 into London-listed equities on top of the existing £20,000 ISA allowance.
This would have been in addition to the existing Cash ISA format and Stocks and Shares ISAs.
As a company we found the notion of a Great British ISA interesting, adding an extra dimension for those seeking to invest and – you’d have to assume – providing a boost for UK stocks, since more money invested can only be a good thing for the market as a whole.
Following the Spring Budget we had awaited more details and fully anticipated we would be providing these as an option for our clients.
While the new Labour Government has yet to officially announce the plans have been scrapped, several respected news platforms are reporting this is the case, with ‘Government figures’ confirming the GB ISA will not see the light of day.
“We are not planning to complicate the ISA landscape even further,” one such told the Financial Times, as reported on ft.com.
The Treasury has insisted no decision has yet been made, however it does appear as if the writing is on the wall.
It seems some of the major investment sites had been warning the Treasury this would make things ‘too complicated’ and could even deter people from making use of the tax-free allowances.
Why this should be so when the scheme on paper appeared to offer people more options, we are not sure. One does wonder whether the GB ISA would have provided inconvenient competition for those larger platforms looking to sell their own investment products.
The press is reporting that current Chancellor Rachel Reeves has instead set out a blueprint that could support UK equities by funnelling more defined contribution pension money into a wider range of UK assets.
The ‘investment sites’ it appears are in fact urging the Government to simplify the ISA market further.
From our perspective, while simple is good on one level, it is also good to be able to offer clients a range of investment options – and if people are willing to invest thousands each year up to the £20,000 ISA limit, one would assume they would not balk at engaging an Independent Financial Adviser (IFA) such as ourselves to help guide them through the process.
If you are serious about investing and growing your investment, simply dumping money in a Cash ISA will not grow your investment by any significant amount, since with inflation over time, your Pound becomes worth less. Inflation is beginning to rise again, due in part to the large public sector pay rises announced recently.
In short, the ‘cash under the mattress’ option is not your best bet, but that doesn’t mean you have to ‘play the markets’ like a high stakes high roller either!
There are various investment options available and while no investment is entirely without risk, good guidance can make all the difference, so if you had been interested by the now-deceased GB ISA, get in touch with us and discover what other options are available.
