The Investment Association (IA) has urged the government to launch an ‘Inclusive Investment Strategy’ in the upcoming Autumn Budget to help create a culture of inclusive investment, driving economic growth and boosting people’s financial security.

It stated that the strategy would seek to bring the benefits of investing to more households, increase investment levels, and channel greater investment into productive capital.

This strategy included making financial advice accessible for all, with the IA calling on the government and Financial Conduct Authority (FCA) to continue their work on the advice/guidance boundary reform to “empower consumers” through accessible and inclusive financial advice.

It argued that this would break down barriers to consumer investment and enhance financial resilience.

The association’s proposed strategy also urged the government to “reset the approach to risk” and bridge the gap between precautionary cash savings and long-term investment.

It said the government must reform risk disclosures across all asset classes to focus on informing, not just warning, and empower consumers to take appropriate risk and understand the benefits of investment.

Furthermore, the IA’s policy asks included reform to the UK’s ISA regime to make it easier and simpler for investors, calling on the government to reset the balance between Stocks and Shares and Cash ISAs to encourage long-term investment.

“A lower limit should be placed Cash ISAs, while the Stocks and Shares allowance keeps pace with inflation,” the association said.

“The Stocks and Shares ISA should also be rebranded as an Investment ISA and include all suitable funds, including Long-Term Asset Funds (LTAFs) to encourage greater investment in productive capital.”

Research from the IA found that 23 per cent of people hold Stocks and Shares ISAs, while 43 per cent were not confident they would know how to open and put their money into one.

By comparison, 72 per cent of people would feel confident opening and placing their money into a cash ISA.

The IA also called on the government to ‘supercharge’ pensions growth to build future financial resilience, after its research showed that just 10 per cent of UK pension holders over 55 felt confident they were saving enough into their pension to live comfortably in retirement.

It described the upcoming Pensions Review as a welcome and critical opportunity for reform, urging the government to build on auto-enrolment by recognising that the minimum contribution level of 8 per cent was not high enough for most people.

“This year’s Autumn Budget comes at a critical moment for the new government, and is a clear opportunity for Rachel Reeves to recognise the role the investment management industry can play in securing the future of our nation,” commented IA chief executive, Chris Cummings.

“Too many people in the UK are taking one of the biggest financial risks of all: taking no risk. This needs to change.

“We must create a culture of investment that allows more people to benefit from the UK’s position as an international centre for investment management, and work together to move away from ‘safetyism’ – the overemphasis on avoiding risk without considering the unintended consequences.

“It is not only the UK economy that will reap the rewards, but millions of households across the UK that could benefit from the boost investment can bring to their long-term financial resilience.”

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