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Global asset managers, banks and the London Stock Exchange have agreed to fund a UK government-backed campaign aimed at encouraging people to invest, in an attempt to bolster retirement pots and funnel money into the domestic economy.
Vanguard, the world’s second-largest asset manager, JPMorgan Personal Investing, and HSBC UK are among the 19 financial firms that will help launch the UK Retail Investment Campaign, which is set to be launched in April.
However, the campaign has been hit by teething issues after some of the groups originally involved, including AJ Bell, Interactive Investor, Trading 212, Freetrade and Octopus Money, pulled out.
One person close to one of the firms said the withdrawal was partly because of the cost of the campaign borne by the firms.
The initiative is aimed at providing “clear information” and “practical support” to help people decide whether investing is right for them and to give them more confidence over picking assets, according to the Investment Association, the trade body organising the drive.
The initiative has also been backed by Aviva, Barclays, Fidelity International, Hargreaves Lansdown, Jupiter Asset Management, Legal & General, Lloyds Bank, NatWest Group, Quilter, Robinhood UK, Schroders, St James’s Place, Alliance Witan and Xtrackers by DWS, the provider of exchange traded funds.
It is part of a broader effort by the government and chancellor Rachel Reeves to encourage more people sitting on excess savings, estimated at over £600bn, to put more into investments and in turn boost the UK economy.
The campaign, also backed by the Financial Conduct Authority and the Money and Pensions Service, is expected to cost about £7mn in the first year, a person familiar with the plans said.
“With only just over a third of UK adults agreeing that ‘investing is for someone like me’, many people could be missing out on the benefit that investing could bring,” said Chris Cummings, chief executive of the Investment Association and deputy chair of the campaign.
Reeves said: “Britain is a world-leading financial centre and the FTSE has grown to near record highs this year, but we want more people to benefit from this success. By getting Britain investing again, we can put more money in people’s pockets and drive economic growth.”
The investment advertising drive is part of a broader package of measures by the government and policymakers to encourage individuals to invest, including a move to make a type of financial guidance called targeted support widely available. This will allow financial services companies to offer more affordable help with investing.
Reeves also overhauled the UK’s Isa regime in the Budget, cutting the annual limit on cash Isas from £20,000 to £12,000 from April 2027, and applying rules to stocks-and-shares Isas to stop investors gaming the system.
These rules will include a charge on cash interest within stocks-and-shares Isas and a test to determine whether an investment is eligible or is “cash like”.
Parts of the industry have warned that HM Revenue & Customs could impose a charge on cash interest in stocks-and-shares Isas of 20 per cent — reintroducing a levy that was dropped more than a decade ago.
Some investment firms have also raised concerns over the lack of clarity over the new rules and whether this could even preclude money market funds, which hold short-term, high-quality bonds, from being held.
According to an archived HMRC document, cash held in stocks-and-shares Isas was subject to a flat rate charge of 20 per cent until July 2014.