Policymakers need to take urgent action to halt the decline of the UK equity market and revive a culture of investing among the general public, according to IG.
The UK trading giant’s call for action comes amid growing concern over the health of the UK stock market, with 88 companies exiting the London Stock Exchange in 2024 alone while only 18 joined.
Michael Healy, UK managing director at IG, said: “We’re watching a crisis unfold and we need bold action. Our stock market – once the envy of the world – is in a downward spiral.”
The UK is “stuck in a damaging savings-first mindset”, he noted, with too few people investing to build wealth for the long term.
IG analysis shows that cash savers have seen just one-seventh of the real returns achieved by stock market investors.
In an attempt to turn the tide, IG has unveiled a new campaign – Save Our Stock Market (SOS) – introducing a four-point survival plan.
Abolish cash ISAs
According to IG, cash ISAs are failing savers.
Instead, the government should consider redirecting the associated tax relief towards equity investment, end new cash ISA openings and set the annual allowance for them to zero from April, the trading platform said.
Scrap Stamp Duty
IG describes the house and land purchase tax as a “self-inflicted wound”.
As such, it has called for its removal, noting that the UK is one of the few major economies to penalise equity investment in this way.
Reward investors backing the UK
To boost long-term retail investment in UK-listed companies, IG recommended offering 20% income tax relief on UK shares held within ISAs for at least three years, modelling this idea off the Enterprise Investment Scheme.
Encourage new investors
UK regulators’ “overly cautious” regulatory approach is reinforcing fear of investing, IG said.
Instead, the trading body has called for clearer definitions between advice and guidance to allow financial services providers to better promote long-term investing benefits without regulatory uncertainty.
“For too long, policymakers have been paralysed by the desire to keep everyone happy,” Healy finished. “But the time for working groups is over – this is about getting more Brits investing, while saving a strategic national asset before it’s too late.”