Long term asset funds are set to be included in Stocks and Shares Isas as part of government reforms to boost investment in the UK.
As part of the Leeds Reforms announced by the Treasury today (July 15), chancellor Rachel Reeves said: “We need to double down on our global strengths to put the UK ahead in the global race for financial businesses.”
She unveiled the changes at the offices of Lloyds Banking Group in Leeds.
As well as committing to continue looking at Isa reforms, the government will allow Ltafs to be held in Stocks and Shares Isas from April 2026.
The reforms set out that the UK has the lowest level of retail investment among G7 countries.
To address this banks will send investment opportunities to savers with cash sitting in low-interest accounts.
And high street banks will throw their weight behind an advertising campaign highlighting the opportunities of investing.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, which has signed up to the campaign: said: “By fostering a retail investment culture, making UK markets a more attractive place for listings, and helping UK companies access vital funding, these reforms will help build a more dynamic and equitable financial ecosystem
“It’s still not going to be easy to compete against the might of New York, but with continued collaboration across the industry, these changes should provide more fuel to power an engine of growth and innovation.”
Chris Cummings, chief executive of the Investment Association, said better communication of the benefits of investing will empower more to invest.
He said: “We called on the government to undertake bold reforms to strengthen the UK’s retail investment culture and they have done so.
“We’re also extremely pleased that Long-Term Asset Funds will now be incorporated into the Stocks and Shares Isa — a reform we have long called for to broaden access to private markets.”
The government also pledged to review risk warnings on investment products to ensure they help people accurately judge risk levels.
James Carter, head of platform policy at Fidelity International, said: “Collectively, we all need to do more to educate society on risk and return, and we welcome the government’s plans to review risk warnings on investment products to help people understand their capacity for investment risk alongside the benefits investing can bring.
“We believe that risk warnings on investment products need reform across all asset classes to focus on informing — not just warning. This means empowering consumers by explaining what different types of risk mean and how taking some risk can lead to better outcomes over time.
“Research shows that traditional risk warnings like ‘Capital at Risk’ can put off some people from investing, but when explained in more balanced terms customers, especially women, felt more engaged.”
James Tothill, Investment Specialist at Wesleyan, said advisers and providers will have a role to play in getting people to consider investing.
He said: “While this isn’t about regulated advice in the traditional sense, many of the same consumer needs apply — clarity, confidence, and a route to make informed decisions.
“Advisers and providers alike have a role to play in helping individuals feel more comfortable taking their first steps into investing.”
tara.o’connor@ft.com
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