Wealth management and financial advice firmshave castdoubt over the impact of the Government’s ISA reforms, according to new data from the second iteration of PIMFA’s Regulatory Insights Tracker.
As investors adapt to reforms announced in the Autumn Budget 2025, the decision to cut the Cash ISA allowance remains a key source of contention. When asked which Budget announcement would have the greatest impact on retail investor behaviour, cuts to the Cash ISA allowance were cited most frequently (36%). However, just 7% of firms believe the move will encourage savers to become investors, suggesting that the policy alone is unlikely to drive a meaningful shift in behaviour.
Added to this, firms remain sceptical about the proposed anti-avoidance measures announced by HMRC last year. Fewer than one in five (17%) agreed that investors should be restricted from holding cash in a Stocks and Shares ISA, while 62% disagreed with such an approach, believing it would undermine the ISA regime overall.
The survey also shows that PIMFA member firms remain divided over the Government’s ambition to increase retail investment in UK equities specifically. When asked whether this is a realistic and desirable policy objective, just 41% of firms agreed. At the same time, the data shows that 43% of firms held no strong view, suggesting that many remain uncertain.
PIMFA has previously argued that government efforts to boost direct investment in UK PLC would be better supported by reviewing existing investor incentives, such as Stamp Duty, rather than introducing narrowly targeted policy interventions that risk driving a superficial increase in investment activity rather than delivering sustained, meaningful participation.
Commenting on the findings, Simon Harrington, Head of Public Affairs at PIMFA, said: “Building a culture of retail investment within the UK is a worthy goal and one that we fully support. The UK has £430bn sitting in cash deposits and lags behind other G7 countries in terms of direct exposure to equities. We support many of the initiatives which have been introduced to address this and transform a nation of savers into a nation of investors.
“However, our members and we are not convinced that the Government’s proposed changes to the ISA regime will have a demonstrable impact in building a culture of retail investment. More generally, we are extremely concerned that rather than support and encourage savers to take advantage of the Stocks and Shares ISA wrapper, these proposals will actually undermine it.
We think it’s right that greater retail investor access has been prioritised by this Government. We think that increasing awareness through campaigns such as the Invest for the Future campaign could positively affect consumer attitudes in the long term. But we also know that investors crave stability and are wary of excessive intervention. Such a significant one, targeted at such a small population of savers and investors, risks undermining many of the positive steps taken in pursuit of delivering greater retail access.”
