Incentivising UK investors – Spring Budget 2024

Buying British is best, or is it?

In Jeremy Hunt’s speech for the Spring Budget 2024 today, he set out ways to incentivise UK investors investing and saving in the UK, however this is all light on detail at this stage.

Below are some of the initiatives outlined in the Spring Budget 2024 which aim to incentivise investors. These will come into play throughout 2024. More details are expected in the upcoming months and at Francis Clark Financial Planning, our team will keep you updated. 

Owning shares

As part of the Spring Budget 2024, the Chancellor outlined that leading bank NatWest will offer shares on the stock market. This represents an opportunity for investors in the market. 

More on what was said: 

• “We will proceed with a retail sale for part of the government’s remaining NatWest shares this summer at the earliest opportunity, subject to supportive market conditions and value for money”

Ultimately, higher risk investors may be interested in this scheme, but as we know single company shares are volatile as therefore not for funds where you have a reliance on the capital.

A new British savings bond

The Spring Budget 2024 outlined a national savings and investment bond focused on British investment with a guaranteed interest rate in return for committing your capital for three years.

This could be a useful home for saving for financial projects coming up in three or four years’ time as variable interest rates will drop as inflation continues to reduce. The cash savings are backed by HM Treasury, therefore the depositors compensation limit of £85,000 is not a consideration.

A British ISA

Jeremy Hunt announced, “today following calls from over 200 representatives of the city and our high growth sectors I will reform the ISA system to encourage more people to invest in UK assets”

This Spring Budget 2024 announcement simply outlines a further £5,000 subscription allowance for funds invested in UK companies which have the same tax benefits as current ISAs. The additional £5,000 to invest in tax free savings is a welcomed proposal. However, when this Spring Budget 2024 scheme may be implemented and what it may include asset-wise seems very unclear. The consultation ends on 6th June 2024, and we await more detail.

Mashud Rahman, Head of Investments at Francis Clark Financial Planning says:

 “Over the past few years, we have shifted across to a view that prefers a more global approach, using a smaller allocation towards the UK in light of weaker growth forecasts and continuing political uncertainty, not forgetting the impact of Brexit still looming. The introduction of an UK ISA to encourage growth in the UK is great, however it remains important for investors to remember that a globally diversified portfolio will be better positioned to provide sustainable long term returns amidst the changing macroeconomic environment.”

Spring Budget 2024 Summary

So, is British best?

At Francis Clark Financial Planning, we think that a diversified approach to investing is the best way to achieve long term performance, but the UK does and always will play a part in this. Our team of expert financial planners have a strong experience in monitoring budget announcements and implementing investment strategies to yield the best possible return for investors. We will closely monitor the Spring Budget 2024 as more details continue to be announced. 

If you have questions about what the Spring Budget 2024 announcements may mean for your investments, please contact our team of dedicated financial planners who will be happy to help.