Instead of nodding to your nationality by eating fish and chips or complaining about the weather, now you can put your money where your mouth is when it comes to backing Britain.
Chancellor Jeremy Hunt used part of his Spring Budget last week to boost investment in the UK. This included the launch of a British ISA and a new British Savings Bond.
The reform follows calls from City executives to “reform the ISA system and encourage more people to invest in UK assets”, said ThisIsMoney, but other experts have warned that it will “further complicate an already-complex system and only advantage the wealthiest savers”.
Meanwhile, Rachel Springall of Moneyfacts suggested the success of the British Savings Bond will depend on the rate offered and “there are likely to be other options that pay a higher rate”.
Here is how you could back Britain through your savings and whether the option is worthwhile.
The British ISA
After months of speculation, Hunt confirmed plans for an ISA that can “only be used” on UK-listed companies, said Which?
He announced a separate £5,000 annual allowance that can be invested on top of the usual £20,000 that savers and investors can put in the tax wrapper.
The government is seeking views on the product and how it will work in a consultation that runs until 6 June “so savers won’t see any action on the British ISA until after that point”, said ThisIsMoney.
Investors have steered clear of the British stock market since the UK voted to leave the European Union in 2016.
Investment platform interactive investor highlighted data from the Investment Association, which showed that since 2016 the UK All Companies sector has been the “least popular on four occasions”. It is hoped that the ISA will “revive” its fortunes, the platform said.
Global funds have outperformed UK investments in recent years, added Which?, but past performance isn’t necessarily an indicator for the future and many British stocks “pay impressive dividends and share prices are low by historical standards”.
However, the British ISA could “just add to the complexity” and could “result in a lower take-up”, warned MoneyWeek.
There are also concerns, said ProfessionalParaplanner, that encouraging investment only in UK shares could “undermine the importance of diversification” when investing.
Investors shouldn’t choose investments “out of some vague philanthropic, patriotic duty to the UK economy”, said David Brenchley in The Times, and it is important to choose assets you think will give you the “best return” over time, while not putting all your eggs in one basket.
British Savings Bond
Savers are also set for a new “British landmark” from National Savings & Investment (NS&I), said Hargreaves Lansdown after the chancellor unveiled plans for a British Savings Bond to be launched by the Treasury-backed lender.
NS&I said the new three-year fixed rate bonds will be for investments between £500 and £1m and will go on sale in early April priced “mid-market in relation to similar products”.
This means it is “unlikely to be very exciting”, warned SavingsChampion.
Speaking on Twitter/X, MoneySavingExpert founder Martin Lewis said the “key” will be the rate on offer, and “it will need to be over 5% to be worth it”.
The product could still prove appealing to savers though, said Moneyfacts expert Rachel Springall. “NS&I is a trusted brand and those savers who want their money safe and perhaps want to support UK businesses could well find these attractive”.
There are other ways the government could “incentivise” support for the UK though, said Fidelity. This includes removing or reducing the “burden of stamp duty” when buying shares, reducing the tax rate for UK dividends, simplifying capital gains tax, or reintroducing indexation to encourage longer-term investing.