Reeves’ announcement puts wind in the sails of Saver > Investor campaign

DIY Investor welcomes new plans to target savers with offers to invest in shares – by Christian Leeming

For more than ten years, one of the key objectives of DIY Investor has been to encourage savers who had taken a battering in the low-interest environment, to turn to stock market investing, where returns generally outperform cash over any reasonable time horizon.

Improved financial education and debunking the City have been crucial to this ever-increasing engagement. Where once were risk-disclaimers as long as your arm, we discuss the probability of an investment behaving as we would hope; where once were financial ‘products’ we encouraged users to visualise differing outcomes.

Examples of this engagement can be seen throughout the site – eg

Saver > Investor: How stock market investing can help you get rich slow.

Saver > Investor: Beat your bank account with investing.

Spender > Saver; Saver > Investor

We have also worked closely with Equiniti – our key distribution partner – to target 1.2m corporate investors and educate and motivate them to become the next generation of investors; a conspicuously successful SAYE scheme was Marks & Spencers 2021 scheme – Not just a SAYE scheme; an M&S SAYE scheme

In one of a series of proposals to be delivered by Chancellor Rachel Reeves in her Mansion House speech tonight, savers with cash in low-interest accounts will be targeted with offers to invest their money in stocks and shares instead.

From April, banks will send savers with large cash balances details of possible investments supported with an advertising campaign to raise awareness of the long term benefits of investing for better returns, rather than keeping savings in cash, as the government and chancellor aim to rebound from bruising blows on welfare and the winter fuel U-turn.

“We need to double down on our global strengths to put the UK ahead in the global race for financial businesses, creating good skilled jobs in every part of the country and helping savers’ money go further,” said Reeves, ahead of her speech to City leaders.

The move is part of reforms designed to boost financial services in the UK, known as the Leeds Reforms.

The Treasury had already shelved any immediate plans to make changes to the £20,000 pa subscription limit to cash Individual Savings Accounts (ISAs), although there is a plan to encourage people to invest for better returns, which would also boost growth in the UK economy.

The value of investments in assets such as shares can go down as well as up, and many savers have tended to be cautious over investment risk, despite the fact that the spending power of their savings is eroded by the rate of inflation.

In line with DIY Investor’s focus on ‘probability’, the newly-announced Treasury proposals, include the potential for some of the warnings to be watered down, saying there would be a “review of risk warnings on investment products to make sure they help people to accurately judge risk levels”.

However, there is concern that fraudsters may seize upon letters and messages from banks to encourage investing, and might send out a few invitations of their own; whilst there are some protections in place, savers will need to be wary of some unsolicited messages.

At a meeting with business leaders in Leeds, the chancellor said she wanted to boost investment, and also help first-time buyers by making the government scheme to ensure banks and building societies continue to give low-deposit mortgages to first-time buyers, permanent.

Critics have said that a more practical solution would be to ‘fix’ the Lifetime ISA which has failed to live up to promises to first-time buyers.
Meanwhile, efforts to encourage more individuals to invest rather than keep savings in cash include rolling out ‘targeted support‘ from April next year, to fill the gap between regulated advice and DIY investing.

Major banks and financial firms including Barclays, Lloyds, Vanguard and Hargreaves Lansdown are backing a new advertising campaign highlighting the benefits of investing.

In announcing these measures, Ms Reeves said The ‘much-needed’ measures are intended to ‘really invigorate our financial services sector, but with the core purpose of therefore reinvigorating the whole economy,’ she said.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the planned retail investor campaign would act as a loudspeaker to amplify the message about the opportunity investing can offer.

‘It will be important to stress the value that investing can bring to support crucial life events and retirement planning.
‘A reinvented ‘Tell Sid’ campaign, which shows how investment is helping people with their long-term needs like retirement, will build confidence and pave the way for greater participation in financial markets.’

The famous ‘Tell Sid’ adverts encouraged people to buy shares in British Gas when it was privatised in the 1980s.

All of this entirely chimes with DIY Investor’s fundamental belief that faced with the sky-high price of accommodation, tuition fees, the uncertainty of state provision of healthcare, latter-life care and income in retirement,  people are inevitably going to have to take more personal financial responsibility.

In survey after survey, people acknowledge this need, but say that they do not invest because they are scared of losing their money; our mix of education and timely information has encouraged very many people to engage with their finances and become investors, and they anecdotally tell us that it is the feeling of being in control that makes it all worthwhile.

Where others offer artificial intelligence, we deliver the real McCoy – real people, with real money, making real-life decisions and feeding back; remember there’s always someone just like you – same circumstances, same attitude to risk, same objectives – so what did you do?

If you would like to share your experiences with  our large and rapidly growing band of DIY investors, please email ask@diyinvestor.net

As we say – Do It Yourself, Do it With me, Do it For me – just don’t do nothing!