IG’s Investing Manifesto

1. Phase out Cash ISAs

The ISA system should do more to encourage people to move from saving to investing.

We are calling on the Government to phase out Cash ISAs for new contributions and redirect the tax advantages towards Stocks & Shares ISAs and initiatives designed to help more people become investors.

Cash savings play an important role for people who need to keep money accessible and protected from market movements. But for many savers, the tax advantage of a Cash ISA is limited or non-existent. Basic-rate taxpayers can earn up to £1,000 in savings interest tax-free outside an ISA, while higher-rate taxpayers can earn up to £500. At a 4% interest rate, that means a basic-rate taxpayer would need around £25,000 in savings before they begin to benefit from a Cash ISA, while a higher-rate taxpayer would need around £12,500. The Government estimates that around 84% of people with savings income will pay no tax on that income in 2026-27.

This means many people could hold their cash in a standard savings account without paying tax on the interest, while still benefiting from the accessibility and security of cash. Redirecting the ISA tax advantage towards long-term investment would therefore allow the system to do more to encourage people to become investors.

The trend is moving in the wrong direction. The latest HMRC figures show that Cash ISA subscriptions increased by £26.1 billion in 2024-25, a 37.5% increase on the previous year. This was more than four times the £6.1 billion increase in Stocks & Shares ISA subscriptions, which rose by 19.7%. Cash accounted for 64% of all Adult ISA accounts subscribed to during the year.

Fiscal impact: Phasing out Cash ISAs would not require additional public spending and could generate additional revenue over time. IG modelling estimates that additional Exchequer receipts could reach £610 million a year by 2032-33.

The modelling assumes that the same level of net inflows to Cash ISAs (£48 billion in 2024/25 according to the Bank of England) is diverted elsewhere. To judge where that money would go, we draw on a survey of 1,792 Cash ISA holders conducted by Opinium for AJ Bell in March 2025. Asked what they would do if Cash ISAs were abolished, 51% said they would move their money into a taxable savings account. We then apply an effective tax rate of 17% based on a blended average of current Cash ISA subscriber income bands. 

The modelling does not involve taxing existing Cash ISA balances. Existing savings would retain their tax-free status, while savers could leave their money where it is, switch providers or transfer it into a Stocks & Shares ISA.

2. £1,000 investment at birth

Every child should have the opportunity to become an investor from the moment they are born.

We are calling for the Government to invest £1,000 into a new Junior ISA for every child born in the UK, with the money invested in a diversified fund rather than held in cash. The idea builds on the principle behind the former Child Trust Fund, but with a stronger focus on investment and building long-term wealth.

At current birth rates, this would mean roughly 700,000 children becoming investors by default every year, giving the next generation a direct stake in financial markets from birth. Parents would retain control of the JISA account until the child reaches adulthood, when they could decide whether to continue investing.

Cost: At current UK birth rates of around 700,000 children a year, this would cost the Exchequer in the region of £700 million a year.

Under IG’s high Cash ISA revenue scenario, the estimated £990 million of annual additional receipts by 2032–33 would be sufficient to cover the annual cost of this scheme.

3. First-investor bonus

We also need to help the millions of adults who have never taken that first step into investing.

We are calling for a Government top-up, similar in design to the Help to Buy ISA and Lifetime ISA, for adults who have never held a Stocks & Shares ISA. Someone making their first investment would receive a bonus of up to £1,000, with the Government matching every £1 invested up to the first £1,000.

This would provide a much stronger incentive than the 25% bonus offered by the Lifetime ISA and encourage hesitant first-time investors to make the transition from saving to investing. If just 1% of non-investors used the full scheme, this would generate nearly £1 billion of additional investment into equities.

This would be the adult counterpart to an investment at birth, rewarding the moment someone makes their first active decision to invest and helping existing cash savers become investors.

Cost: The FCA’s Financial Lives Survey 2024 found that 17% of UK adults, around 9.3 million people, currently hold a Stocks & Shares ISA. With the bonus capped at £1,000 per new investor, the cost would scale directly with take-up. Converting 1% of the eligible non-investing population into first-time investors would cost around £450 million a year, while a 2% conversion would cost around £900 million.

Taken together, these measures would use the tax system to shift the emphasis from simply accumulating cash towards helping more people become long-term investors – from birth through to the first active investment decision.

 

1. Abolish Stamp Duty on UK stocks

Investing in British companies should not cost more simply because they are British.

We are calling for the full abolition of the 0.5% Stamp Duty Reserve Tax charged on purchases of UK-listed shares. The levy increases the cost of investing in British companies, while most rival listing venues, including New York and most EU domestic equity markets, do not apply an equivalent charge in the same way.

Removing the tax would lower the cost of investing in UK shares and help make the UK market more competitive with international alternatives.

Cost: Independent research from the Centre for Policy Studies and Oxera suggests abolishing Stamp Duty on UK shares could permanently increase the size of the UK economy by between 0.2% and 0.8%. The estimated fiscal impact ranges from a £1.9 billion loss to a £2.8 billion gain.

2. Don’t raise CGT and Dividend tax

If we want people to invest for the long term, they need to know that the rules will not constantly change around them.

We are calling on the Government to commit to holding Capital Gains Tax and dividend tax rates and allowances stable for a full Parliament. Since 2016, there have been six separate changes to dividend tax rates or the Dividend Allowance and four to the CGT annual exempt amount or main rates - a change roughly every nine months on average. A more consistent policy environment would give investors greater certainty when making long-term decisions and help build confidence in investing.

Cost: No direct cost. This is a commitment to maintain existing rates and allowances, rather than reduce them.