Government support for retail investment

A Westminster Hall debate on government support for retail investment, that is investment by retail customers (as opposed to professional investors) in companies, is scheduled for Tuesday 22 April, from 4:30pm for 90 minutes. The debate will be led by Callum Anderson MP. 

Summary

In 2022, around 41% of UK adults held some form of investment according to the Financial Conduct Authority; of these, 21% held shares in individual companies, 17% had a stocks and shares ISA and 9% had investments in a fund.

However, the share of UK wealth in company stocks is the lowest in the G7 according to research by asset management company Aberdeen.

This partly reflects relatively high investment in pension funds and property, encouraged by pension auto-enrolment and high property prices.

But there is evidence some consumers are not well-informed about how to invest in shares, the potential returns and when doing so may be suitable.

Barclays estimates UK adults hold as much as £430 billion in excess cash. If this was invested in shares, it could provide consumers with better returns over the long-term and help support UK companies which are currently experiencing shortages of capital.   

The government has said it wants more people to participate in retail investment. To that end it is currently developing a financial services growth and competitiveness strategy that, among other things, will consider the matter. It has also announced a review of ISAs though not implemented a cap on the amount savers can put into cash ISAs to encourage investment into shares as the industry has lobbied for.

The Financial Conduct Authority is developing rules that would allow financial firms to provide targeted support to savers on how to invest their money better.