The UK head of a major global trading platform has issued a stark warning against Chancellor Rachel Reeves's proposed raid on cash ISAs, labelling it the wrong strategy to encourage investment among Britons.
A Punishment for Savers
Rupert Osborne, the CEO of Capital.com, told the Mail that it would be deeply unfair for the Labour government to penalise ordinary savers by reducing the amount they can shelter in their tax-free savings pots. He argued that the government is in danger of fostering a nation of 'zombie investors'—people paralysed by financial inertia—unless it shifts its focus from penalisation to public education.
The Chancellor's controversial plan involves slashing the current £20,000 annual ISA allowance. The belief in Westminster is that this measure will entice people to move their hard-earned cash into stocks and shares. However, critics contend that this move will simply strip away a vital tax benefit that has helped millions of people diligently save for goals like a house deposit or to supplement their retirement income.
The Real Barrier: A Lack of Financial Education
A new study from Capital.com, which boasts over seven million customers worldwide, suggests that the core issue preventing people from investing is not a lack of opportunity, but a profound lack of financial literacy. The research found that among those who currently only hold their money in traditional savings accounts and cash ISAs, a mere 16 per cent said they were 'familiar' with how the stock market works.
The study identified the single biggest barrier to investing as fear of online scams, with a staggering 82% of respondents citing it as a major concern. Perhaps even more revealing was the finding that nearly nine in ten people viewed stocks and shares as carrying the same level of risk as speculative cryptocurrency assets.
Call for Incentives and Education, Not Restrictions
Speaking ahead of the crucial Autumn budget on November 26, Mr Osborne stated: ‘What is clear is that people will not change their financial behaviours just because the government tells them to.’
He elaborated, ‘People shouldn’t be restricted from saving. A much better approach would be to focus on incentives, encouragement, and education — not restrictions.’
‘Our own research shows that many everyday investors still can’t distinguish between the risks of blue-chip shares and speculative crypto assets,’ Osborne continued. ‘It’s not that people are risk-averse, they are just lacking awareness and resources to make decisions with confidence, and this is something the industry must help change.’
He concluded with a stark warning: ‘Without better financial education and clearer communication, we risk creating a nation of zombie investors — people stuck on the sidelines, paralysed by inertia rather than empowered to invest with confidence.’
