Reeves seeks to spark retail investor revolution
High street banks Barclays and Lloyds will lead an advertising campaign to encourage more Brits into retail investing as part of a wider effort to get savers to boost the UK economy.
In rallying calls to financial services, Chancellor Rachel Reeves has unveiled a campaign to encourage savers to invest in stocks and bonds, drawing comparisons to the Thatcher-era “Tell Sid” campaign when Britons were urged to buy shares in newly privatised utilities such as British Gas.
Banks will lead the drive to highlight the benefits of retail investing as they will alert customers about investment opportunities and how to move cash from savings accounts to stocks and shares investments.
Other banks and financial services giants to back the campaign include HSBC, NatWest, AJ Bell, Schroders, St James’s Place and Interactive Investor.
The Investment Association will help to drive the campaign while regulators will advise on it, with the government looking to fix a “tangled system of financial advice” and “lengthy risk warnings” that have made it harder for consumers to invest in the UK.
Treasury officials pointed out that stocks and shares had performed better than normal cash savings accounts, with savers putting £2,000 today into stocks and shares likely to be some £9,000 better off in 20 year’s time on current trends.
City trading giants have welcomed the move, with AJ Bell’s director of public policy describing the idea as potentially “hugely powerful as a soapbox for shouting far and wide about the benefits of investing.”
“Investing is often seen as something that is only for relatively wealthy people, or something which you need a great deal of financial knowledge to get involved in. In fact, it is relatively easy, with straightforward products designed for ordinary people.”
The changes will come alongside a review of risk warnings on investment products and changes to how the Financial Conduct Authority rules on investment advice.
The government shelved plans to slash the cash ISAs £20,000 limit as part of a bid to get Brits to put money into stocks and shares ISAs, which also offer tax-free returns.
Long term asset funds, a regulated investment structure that enables funding in illiquid assets such as real estate, will be included in stocks and shares ISAs next year, which will give Brits a stake in infrastructure developments.
Banks to help make UK the ‘best location’
Rachel Reeves’ Leeds Reforms, set to be announced during her Mansion House speech, will aim to double the real growth rate in financial services net exports over the next ten years.
“We need to double down on our global strengths to put the UK ahead in the global race for financial businesses, creating good skilled jobs in every part of the country and helping savers’ money go further through our plan for change,” Reeves said.
City minister Emma Reynolds claimed the Leeds Reforms would make the UK the “best location” for investment, tearing down barriers to entry.
Steven Levin, CEO of Quilter, said: “The push to encourage investment through nudges and a national campaign reflects a clear intent to reshape behaviour at scale,” adding that “the government is laying the groundwork for more inclusive financial participation.”
He suggested that “improving financial education in schools should also be a long-term priority to help nurture a UK investment culture,” and that such a move “could be instrumental in helping the next generation grow up with the confidence and knowledge to become the investors of tomorrow.”
Some City leaders have criticised plans to unveil a new “Tell Sid” campaign in the past.
Former London Stock Exchange Group (LSEG) boss Xavier Rolet said stewards of UK capital markets had focussed on “gimmicks and quick headline-grabbing fixes” over offering tax incentives and making structural changes.
“The revitalization of UK markets requires an urgent recalibration of their regulatory and fiscal framework,” he wrote in a recent LinkedIn post.