Latest news with #UK-focused
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
The Star
5 days ago
- Business
- The Star
London listing advisers shrug off Shein IPO snub
Change of plan: Shein clothing on a rail during a nationwide promotional tour in Britain. Although London signed off on Shein's IPO application, the retailer is instead turning to Hong Kong for its listing. — Reuters LONDON: This time last year Britain was mounting a charm offensive on online retailer Shein, with ministers saying they had conversations with the seller of US$5 T-shirts about the benefits of a London listing. A year later and efforts to win over what looked to be one of the largest UK initial public offerings (IPOs) in the last decade have come to nought. Although the UK signed off on Shein's IPO application, the retailer is instead turning to Hong Kong for its listing, Reuters reported Wednesday. Coming after a string of London delistings and IPO defections, Shein's departure risks delaying efforts to revive the City's appeal while the global economic environment remains volatile. 'Shein's listing would have been a boost to the market,' said Alasdair Steele, corporate partner with law firm CMS. 'However, there was never any guarantee that a single large listing would reignite the IPO market.' Last summer, Britain overhauled listing rules to make its exchanges more attractive to companies. That has yet to translate into substantial dealmaking. UK equity capital markets deal values fell in the year to date to US$9.2bil, down 16% from the same period last year and down more than 70% from a peak in 2021. Hong Kong on the other hand has seen its equity capital markets deal values rise nearly fivefold, according to Dealogic data. In the background, UK-focused equity funds have suffered many months of outflows. Shein, whose biggest market is the United States, faces a concrete threat to its low-price model after President Donald Trump ended a duty exemption for small packages shipped from China. But even before the tariff war, it had already downsized its valuation ambitions and faced opposition from some lawmakers. Shein has faced allegations that its clothes contain cotton from China's Xinjiang province, where the United States has accused the Chinese government of human rights abuses and forced labour. Beijing denies any abuses. Shein has previously said that it has a zero-tolerance policy for forced labour and requires its contract manufacturers to only source cotton from approved regions. Earlier this year a senior lawyer at Shein was questioned by a British parliamentary committee on its supply chain, and committee chair Liam Byrne raised concerns about the evidence from that hearing with the London Stock Exchange and Britain's financial conduct authority, in charge of green-lighting IPOs. Shein gave details of its supply chain in China in written responses to the parliamentary committee's questions in January, and said it does not allow Chinese cotton in its clothes sold in the United States, which has a law banning products made with Uyghur forced labour. James Alexander, CEO of UK Sustainable Investment and Finance Association, a body that promotes sustainable finance, said: 'The prospect of Shein listing in the UK has long raised concerns with investors around the company's transparency, and the risks of being exposed to allegations of modern slavery and human rights abuses in its supply chains.' Shein had no immediate comment. 'The Shein news is much more to do with China than London,' said Lisa Gordon, chair of investment bank Cavendish and a member of the Capital Markets Industry Taskforce – a group dedicated to the revival of Britain's markets. 'The London market is in a very good position.' — Reuters
North Wales Chronicle
5 days ago
- Business
- North Wales Chronicle
Nationwide cheers ‘outstanding' year after completing Virgin Money takeover
The mutual reported pre-tax profits of £2.3 billion for the year to March 31, up from £1.8 billion the previous year, which came despite it handing out a record £2.8 billion in value to members including £1 billion in rewards. Nationwide announced on Thursday it would distribute its third Fairer Share payout to eligible members next month, working out at £100 each. Last year, it paid out £385 million to 3.85 million customers, while members also benefited from a one-off £615 million reward as part of the 'The Big Nationwide Thank You'. On an underlying basis, pre-tax profits fell to £1.9 billion from £2 billion as Nationwide said it focused on offering competitive interest rates to customers. Debbie Crosbie, group chief executive of Nationwide Building Society, said: 'Nationwide has had an outstanding twelve months. 'We returned a record £2.8 billion in value to our members and recorded our highest ever year for growth in mortgage lending and retail deposit balances.' She added: 'The Virgin Money performance was strong in the six months since our acquisition, with improvements in customer service and a return to growth in mortgage lending.' The firm completed the £2.9 billion takeover of Virgin Money last year, which has seen it become the UK's second largest mortgages and savings provider. The group said integration of the acquisition was 'progressing well'. Nationwide said it was continuing to run the two businesses separately initially after the acquisition and had no plans for job cuts in the short-term. But Ms Crosbie said it was 'too early to say' what impact there would be on staff of the combined group further out as it integrates the businesses. 'Every business always reviews its workforce and we'll continue to do that on an ongoing basis, but it's too early to say if there'll be an impact on the broader workforce,' she said. She also signalled Nationwide would keep Virgin Money's Newcastle headquarters, with Ms Crosbie saying 'the current footprint that we have will remain the same'. Virgin Money's figures showed it notched up a record £15.5 billion of net lending (new lending less redemptions) over the year, while retail savings balances grew by 35% to £260.7 billion. Its interest rates on retail deposits were on average 30% higher than the market, according to the group. It is pencilling in modest growth in the wider UK economy of 1.4% this year and said borrowers remain resilient. 'The global economic outlook remains highly uncertain, but UK households and the UK-focused businesses we support appear generally well placed for potential shocks,' it said.
Rhyl Journal
6 days ago
- Business
- Rhyl Journal
Nationwide cheers ‘outstanding' year after completing Virgin Money takeover
The mutual reported pre-tax profits of £2.3 billion for the year to March 31, up from £1.8 billion the previous year, which came despite it handing out a record £2.8 billion in value to members including £1 billion in rewards. Nationwide announced on Thursday it would distribute its third Fairer Share payout to eligible members next month, working out at £100 each. Last year, it paid out £385 million to 3.85 million customers, while members also benefited from a one-off £615 million reward as part of the 'The Big Nationwide Thank You'. On an underlying basis, pre-tax profits fell to £1.9 billion from £2 billion as Nationwide said it focused on offering competitive interest rates to customers. Debbie Crosbie, group chief executive of Nationwide Building Society, said: 'Nationwide has had an outstanding twelve months. 'We returned a record £2.8 billion in value to our members and recorded our highest ever year for growth in mortgage lending and retail deposit balances.' She added: 'The Virgin Money performance was strong in the six months since our acquisition, with improvements in customer service and a return to growth in mortgage lending.' The firm completed the £2.9 billion takeover of Virgin Money last year, which has seen it become the UK's second largest mortgages and savings provider. The group said integration of the acquisition was 'progressing well'. Nationwide said it was continuing to run the two businesses separately initially after the acquisition and had no plans for job cuts in the short-term. But Ms Crosbie said it was 'too early to say' what impact there would be on staff of the combined group further out as it integrates the businesses. 'Every business always reviews its workforce and we'll continue to do that on an ongoing basis, but it's too early to say if there'll be an impact on the broader workforce,' she said. She also signalled Nationwide would keep Virgin Money's Newcastle headquarters, with Ms Crosbie saying 'the current footprint that we have will remain the same'. Virgin Money's figures showed it notched up a record £15.5 billion of net lending (new lending less redemptions) over the year, while retail savings balances grew by 35% to £260.7 billion. Its interest rates on retail deposits were on average 30% higher than the market, according to the group. It is pencilling in modest growth in the wider UK economy of 1.4% this year and said borrowers remain resilient. 'The global economic outlook remains highly uncertain, but UK households and the UK-focused businesses we support appear generally well placed for potential shocks,' it said.
Yahoo
6 days ago
- Business
- Yahoo
Nationwide posts bumper year after stamp duty rush
Nationwide Building Society bolstered its takings in the 12 months to March 31 2025, after a rush to beat the stamp duty deadline led to a surge in first-time buyers. The firm said it served more first-time buyers than any other lender in the UK, with 120,000 purchasing their first home. This was a significant leap from 64,000 in the previous period. The jump came after Chancellor Rachel Reeves slashed the stamp duty threshold for first time home buyers to £300,000 from £425,000. As Brits flocked to beat the tax hike, Nationwide's underlying income increased to £5.2bn, up from £4.7bn for the previous 12 months. This helped pre-tax profit increase nearly £500m to £2.3bn for the period. But the mutual battled rising costs, which increased to £3.2bn from £2.5bn. The firm cited costs following its takeover of landmark Virgin Money last March. Nationwide's £2.8bn acquisition of the then FTSE 250-listed lender was completed at the start of October, forming the UK's second-biggest retail banking provider, beating Natwest but falling into second place to Lloyds Banking Group. The firm said costs following the takeover topped £689m, citing 'planned, short-term investment to improve customer experience'. Unlike listed banks, building societies offer better rates on savings and loans to distribute excess capital, as opposed to dividends and buybacks. The company recorded a record £2.8bn in value returned to customers. Debbie Crosbie, Nationwide chief executive, said the firm was 'well placed' to support customers despite economic activity. Crosbie said the 'pace of UK economic activity has remained subdued and is likely to improve only gradually'. 'Solid labour market conditions, resilience in real earnings and lower interest rates should support housing market activity and growth in deposits.' Whilst the global economic outlook remains 'highly uncertain,' she said UK households and UK-focused businesses were 'generally well placed for shocks.' Kevin Parry, chairman of Nationwide, said: 'The acquisition of Virgin Money represented a significant strategic advance for Nationwide. It will bring the benefit of mutuality to more individuals and to business customers.' 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
