Most financial advisers in the UK think that reducing the cash ISA limit will not encourage more investment into UK stocks.
A poll of advisers by savings platform Flagstone found that 68% of IFAs said that reducing the cash ISA limit won’t encourage more investment in UK equities.
Meanwhile, 47% said that stubborn inflation, employers’ national insurance and the threat of further tax hikes will prevent the sort of growth their clients would need to see in UK equities to investing in them worthwhile.
Around a third (32%) of advisers said they had not recommended UK-focused funds to clients for over three years.
Claire Jones, head of strategic relationships and new business at Flagstone, said: “Our research, drawn from some of the finest financial planning and advice minds in the country, lays bare a significant issue with the idea that decreasing the cash ISA limit will increase appetite among savers to take investment risk.
“The data suggests that this idea is too simplistic and ignores significant macro-environment challenges that make investment less appealing to a large demographic,” she added.
“The expectation that more clients will move more cash to general savings accounts corresponds with what we’re hearing from our adviser-partners. Making sure that clients understand the compelling risk-adjusted returns they can enjoy from a proactive cash management strategy looks set to become a larger part of many advisers’ day-to-day.”
