Reeves to put more savers in the stocks

CHANCELLOR Rachel Reeves has shocked savers by floating plans to slash the annual Cash ISA allowance to just £4,000. Now she may target Stocks and Shares ISAs too.

- By Harvey Jones

Reeves has mooted cutting back on Cash ISAs to discourage people from building large sums in cash and instead push more towards investing in the stock market, where returns tend to be higher over the long term.

Now there are growing rumours that Reeves may go further and restrict where Stocks and Shares ISA investors put their money, potentially forcing them to buy UK shares only.

City broker Peel Hunt has now published a paper arguing that ISA tax breaks should be refocused to drive money into UK-listed businesses.

ISA tax relief costs the Treasury £9.4billion a year, but Peel Hunt said: “Providing tax breaks for overseas investments makes little sense.”