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The Herald Scotland
4 days ago
- Business
- The Herald Scotland
Uncertainty for savers as Rachel Reeves eyes ISA changes
Recent months have seen intense debate about potential ISA reforms, particularly following Reeves' Spring Statement in March, where she expressed a desire to 'get the balance right between cash and equities to earn better returns for savers, boost the culture of retail investment, and support the growth mission'. The prospect of slashing the cash ISA allowance from £20,000 to as low as £4,000 has sparked alarm, with fears it could penalise cautious savers. On 20 May, the Chancellor confirmed to the BBC that the overall £20,000 ISA allowance would remain intact. Yet, her silence on the specific cash ISA limit within the overall allowance has kept speculation alive, with a potential cut remaining on the table as part of a broader review expected to be launched in July's Mansion House speech. The rationale behind potential reforms is partly rooted in a desire to channel more capital into UK markets. Reeves has been vocal about revitalising the London Stock Exchange, noting that 'hundreds of billions of pounds in cash ISAs' are not being invested productively. This echoes the recent Mansion House Accord, an agreement with the UK's largest workplace pension scheme providers to allocate at least 5% of their default funds to UK private market assets by 2030, which could be followed by further measures aimed at supporting UK public markets too. By potentially nudging cash savers towards stocks and shares ISAs, the government may also hope to address the UK stock market's challenges, including a decline in initial public offerings (IPOs), companies relocating listings overseas where they can command higher valuations and private equity buyouts, factors which have led to a 20% decline in the number of UK listed companies over the last five years. One proposed reform, floated by investment bank Peel Hunt, involves simplifying the ISA system by merging cash and stocks and shares ISAs into a single product and abolishing lifetime ISAs and innovative finance ISAs. Peel Hunt argues that with ISA tax reliefs costing the Treasury an estimated £9.4 billion annually, redirecting these incentives towards UK-focused investments could deliver better value for taxpayers. While such a move would align with Reeves' growth agenda, it would severely limit investor flexibility. From a public policy perspective and for the brokers and fund managers who make a living off the UK markets, the case for refocusing ISAs on UK assets may seem compelling. The UK stock market has struggled as pension funds have dramatically reduced their UK equity holdings since the late 1990s, and retail investors have increasingly favoured US equities. However, from the perspective of ISA investors, such restrictions would be a step backward to the old days of personal equity plans, which had such limitations on overseas investments before they were replaced by ISAs. Limiting stocks and shares ISAs to UK assets – or requiring a minimum level of UK exposure - would reduce the scope for diversification, a cornerstone of sensible investing. Historically, overseas markets —notably US equities — have often outperformed UK equities over long periods. Forcing investors to prioritise UK stocks could undermine the very returns Reeves seeks to enhance. A potential beneficiary of a UK-focused ISA regime could be the investment trust sector, which has faced headwinds recently with trusts trading at wide discounts, limited new share issuance and the arrival of activists on the scene. UK-listed investment trusts that invest globally, many of which are managed in Edinburgh, might attract fresh demand if investors are required to allocate a portion of their ISA to UK-listed assets. Such trusts could offer a workaround, allowing exposure to international markets while supporting the UK financial services sector, a significant tax revenue generator and employer in both London and Edinburgh. An alternative to mandating UK investment in ISAs could be through incentives or the removal of impediments, such as scrapping stamp duty on UK share purchases within ISAs, which undermines the 'tax-free' promise and is a disadvantage over buying US shares where no such transaction tax exists. An even bolder idea would be a modest income tax credit or top-up 'bonus' for stocks and shares ISA subscriptions, subject to a minimum holding period to prevent short-term trading. This could incentivise equity investment while preserving saver choice. As we await the launch of the consultation and its outcome, likely to be detailed in the Autumn Budget, savers and investors would be wise to make use of the current allowances while they can, especially given the high tax burden. The £20,000 ISA allowance is safe for now, but changes to cash ISAs or restrictions on stocks and shares ISAs could reshape how we save and invest in the future. The Chancellor's desire to boost UK investment is laudable, but it must not come at the expense of savers' flexibility or financial security. Jason Hollands is a managing director at wealth management firm Evelyn Partners which has offices in Glasgow, Edinburgh, and Aberdeen
Yahoo
20-05-2025
- Business
- Yahoo
This airline CEO is having another shot at a windfall worth more than $100 million
Michael O'Leary is set for a 100 million euro windfall if Ryanair stock stays above 21 euros for a month. It's been there for 17 days, and rose again on Monday after reporting earnings. Ryanair's profits fell 16%, but passenger numbers were up and a big share buyback was approved. The CEO of Europe's biggest airline is set for another shot at one of the continent's biggest windfalls. Ryanair's Michael O'Leary stands to receive stock options worth 100 million euros ($113 million) if the Irish budget carrier's share price trades above 21 euros for 28 days. The stock has done well recently, staying above that price since May 2. It added another 3.3% in Dublin on Monday to just over 23 euros, valuing the company at more than 24 billion euros ($27 billion.) While it spent a few days at this level last March and April, this is O'Leary's most promising rally yet. In Monday's full-year earnings, Ryanair reported profits of 1.61 billion euros — a 16% fall compared with the previous 12 months. While it reached a record 200 million passengers, tickets were 7% cheaper. O'Leary cited consumer spending pressure and "a big drop off" in bookings from online travel agents, following a dispute with them. The airline also warned growth would slow due to delayed deliveries of Boeing planes. Having fewer planes than expected also meant that staffing costs were 17% higher this past financial year. Ryanair also announced a share buyback worth 750 million euros. Analysts at Peel Hunt said the airline traded at a "significant premium" to its peers and they maintained a "hold" rating with a target price of 21.50 euros. The Financial Times previously reported that O'Leary's bonus deal was supposed to expire last year before being extended until 2028. The potentially enormous payout isn't without its controversies, as Ryanair is known for its ancillary fees of up to three figures for changing a name or for hold baggage. The airline is getting rid of paper boarding passes later this year, however. Such fees allow it to keep airfares as low as $20, but on some routes, tickets can still cost hundreds of euros. When The Wall Street Journal asked about the potentially huge payout in an interview last year, the Ryanair chief gave a characteristically outspoken response. "If premiership footballers are earning fucking 20 million a year and [Kylian] Mbappé is being paid 130 million to go play football for fucking Real Madrid, then I think my contract is very good value for Ryanair shareholders," O'Leary quipped. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
19-05-2025
- Business
- Business Insider
This airline CEO is having another shot at a windfall worth more than $100 million
The CEO of Europe's biggest airline is set for another shot at one of the continent's biggest windfalls. Ryanair's Michael O'Leary stands to receive stock options worth 100 million euros ($113 million) if the Irish budget carrier's share price trades above 21 euros for 28 days. The stock has done well recently, staying above that price since May 2. It added another 3.3% in Dublin on Monday to just over 23 euros, valuing the company at more than 24 billion euros ($27 billion.) While it spent a few days at this level last March and April, this is O'Leary's most promising rally yet. In Monday's full-year earnings, Ryanair reported profits of 1.61 billion euros — a 16% fall compared with the previous 12 months. While it reached a record 200 million passengers, tickets were 7% cheaper. O'Leary cited consumer spending pressure and "a big drop off" in bookings from online travel agents, following a dispute with them. The airline also warned growth would slow due to delayed deliveries of Boeing planes. Having fewer planes than expected also meant that staffing costs were 17% higher this past financial year. Ryanair also announced a share buyback worth 750 million euros. Analysts at Peel Hunt said the airline traded at a "significant premium" to its peers and they maintained a "hold" rating with a target price of 21.50 euros. The Financial Times previously reported that O'Leary's bonus deal was supposed to expire last year before being extended until 2028. The potentially enormous payout isn't without its controversies, as Ryanair is known for its ancillary fees of up to three figures for changing a name or for hold baggage. The airline is getting rid of paper boarding passes later this year, however. Such fees allow it to keep airfares as low as $20, but on some routes, tickets can still cost hundreds of euros. When The Wall Street Journal asked about the potentially huge payout in an interview last year, the Ryanair chief gave a characteristically outspoken response. "If premiership footballers are earning fucking 20 million a year and [Kylian] Mbappé is being paid 130 million to go play football for fucking Real Madrid, then I think my contract is very good value for Ryanair shareholders," O'Leary quipped.
Bloomberg
14-05-2025
- Business
- Bloomberg
Trump Winds Down Riyadh Trip; Humain & Big Tech's Gulf Deals
US equity futures fluctuate after the S&P 500 and the Nasdaq 100 erased year-to-date losses. The dollar weakens on news of currency talks between the US and South Korea. President Trump winds down his visit to Saudi Arabia after a slew of deals were cut by American big tech firms and the Kingdom's newly created AI firm, Humain. Republicans say a SALT cap deal is likely. Kallum Pickering of Peel Hunt says the "hopium" theme running through markets is unsustainable in spite of trade war de-escalation. Marvin Loh of State Street says there remains a stagflation concern. 'Bloomberg Brief' delivers the market news, data and analysis you need to set your agenda. (Source: Bloomberg)
Yahoo
11-05-2025
- Business
- Yahoo
Looking to invest in the stock market? Here are 3 top picks from the pros to consider
With thousands of companies to pick from, finding winning investments in the stock market can be quite an arduous task. That's why many investors like to 'cheat' and seek advice from professionals and analysts. Among these, the investment bank Peel Hunt has quite a reputation for success. As 2024 was about to kick off, its team of analysts revealed its top picks for the coming year. And while 12 months isn't long enough to properly judge performance, the recommendations were successful at beating the FTSE All-Share. Skip ahead, and the same team of analysts have released their latest picks for 2025. So let's take a look at some of their highest conviction ideas. Peel Hunt's 2025 list of recommendations included Domino's Pizza Group (LSE:DOM), DiscoverIE Group, and Marks & Spencer. So should investors consider these enterprises right now? Even with all the knowledge and insights professionals have at their fingertips, mistakes still happen. The stock market can be quite unpredictable in the short term. So it's paramount that investors discover exactly what they're getting into. With that in mind, let's take a closer look at the first business on this list, Domino's Pizza. Peel Hunt's excitement surrounding the pizza franchise chain is linked to management's expansion plans. Hunt analysts believe the company will successfully expand its store count to 2,000, boosting earnings to £200m in the process. For reference, those figures currently stand at 1,375 and £138.1m respectively. If these projections prove accurate, the firm has placed a share price target of 425p. Compared to where the shares are trading today, that represents a 57% potential gain. However, while that's obviously exciting, it's important to recognise the risks attached to this opportunity. Not all analysts agree with Peel Hunt's conclusion. In fact, one firm has projected the stock could fall to 250p moving forward. That's because a few things have to go right for management to hit its goals. Expanding the store count to 2,000 will be heavily dependent on franchisee buy-ins, which isn't guaranteed, especially in a higher interest rate environment. What's more, Domino's isn't the only pizza company attempting to capitalise on the UK and Irish fast food markets with stiff competition coming from Pizza Hut and Papa John's. If food quality starts to suffer or the firm doesn't adapt its menu to changing consumer tastes, Domnio's future growth could fall short of analyst projections. Given the firm's track record and the improving relationship with franchisees, Domino's Pizza seems worthy of a deeper dive from investors looking for growth opportunities in 2025. The same might be true for the other businesses on this list. Marks & Spencer recently ran into some — ongoing — trouble following a cybersecurity breach. But this might just be a speed bump that's created a buying opportunity. Similarly, DiscoverIE also seems to show promising growth avenues to explore. But like with all investments, nothing is ever risk-free. And investors need to do their due diligence to uncover what could go wrong as well as what could go right. The post Looking to invest in the stock market? Here are 3 top picks from the pros to consider appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Zaven Boyrazian has positions in Alpha Group International. The Motley Fool UK has recommended Alpha Group International and Domino's Pizza Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
