
Rachel Reeves is being urged to scale back tax breaks for cash ISAs in a bid to push Britons to move their savings into the stock market.
Around 12.4 million adult ISA accounts were subscribed to in 2022 to 2023, up from 11.8 million in 2021 to 2022 - underlining their popularity with the public.
Cash ISAs allow savers to earn tax-free interest on up to £20,000 per year - and many prefer to keep their money in these more secure accounts rather than invest in a more volatile stock market.
But big city firms are suggesting to the chancellor that almost £300bn held in cash ISAs could generate better returns if invested in stocks and shares - while at the same time supporting the city’s equities market.
One senior banker told the FT the issue had been raised by finance executives at a recent meeting with Reeves and that she "had not rebuffed the idea".
The chancellor is working hard to promote growth.
"The state should not be giving a tax break for us all to park our money in cash," said Andy Briggs, chief executive of Phoenix.
It’s not clear when any such shake-up to the savings market could occur, or how seriously the chancellor is taking the claims.
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