Getting people investing in the UK market is a key concern for the government, as highlighted by chancellor Rachel Reeves’ policies.
While changes in her Budget, such as reducing the cash ISA allowance from April 2026 to £12,000 for under-65-year-olds while maintaining the stocks and shares ISA limit at £20,000, are designed to get more people putting money into the market, not all believe this government has done enough.
Gervais Williams, chair of equities at Premier Miton, said it was critical the UK has a strong stock market, as “investing locally means you generate local companies and they generate local work employment”.
As such, “when the local equity market works well, it delivers not just for investors, but actually for those who aren’t savers,” as it builds a healthier economy.
Yet markets have been shrinking globally, with fewer companies listing on stock exchanges – particularly here in the UK.
He suggested the government has been too focused on providing capital for private businesses through its Mansion House Compact initiative, which encourages large pension houses to increase investments into unlisted equities in an effort to deliver long-term value for savers.
“They just haven't worked out that, actually, to get the clearance in the private companies, you need quoted markets to be alive and there's been a real backlog, not just in the UK, but globally, where the number of listed companies has come down rather than gone up. And so this is a major issue,” said Williams.
A thriving public market encourages more businesses to list, giving them capital to invest and boosting productivity. This would allow these firms to “actually pay wages above inflation” and take some of the pressure off the government to intervene on things like gas bills. UK businesses also pay tax in this country, which means they add to the government’s coffers.
However, he did acknowledge there was a drive for a more thriving market and predicted “forthcoming governments” will look to push the agenda much further.
“We'll get lots of national politicians [focusing on] UK savings, UK jobs and bringing our capital back. I think that’s going to be a major trend,” he concluded.
Matthew Beesley, chief executive of Jupiter Asset Management, disagreed with Williams, noting the government has “done a lot” to improve the state of the UK market and drive more investment to domestic companies, which is attracting attention already from overseas investors.
“We have seen a sea shift on this as a subject, with a raft of changes and initiatives,” he said.
He noted that “the demise of the UK market has been a multi-year, multi-decade issue”, so it would be “unrealistic to see it fixed overnight”, but highlighted some key policies that could pay off in the future.
“A few months ago they [stated that] they're going to change the approach towards financial literacy in the classroom. It's a fundamental building block that's been woefully missing from this country, but that's going to have a payoff probably over the next 20 years, maybe even longer,” Beesley said.
“We're not to get excited about that today, but this is a great foundational reform that’s going to make a difference over time.”
Another more immediate policy is easing the regulatory burden by the Financial Conduct Authority (FCA), which he described as having now become “a lot more balanced”.
“Being a listed company and running an asset management firm that is regulated by the FCA is different today than it was many years ago. The slew of regulatory pressures we've all faced has somewhat abated. There's a pragmatism now about the regulator. That's got to be a good thing,” he said.
All this is paying off already, he argued.
“As a UK-listed asset management [firm] with a big UK equities business, we've got lots of clients coming to us today from outside of the UK, engaging with us and talking about UK equities because they see some of these points,” the Jupiter CEO said.
“Having been absent for the past 10, 15, or 20 years, which is the right thing to have done, they're now wondering whether that's something to address or redress now.”
And for investors, now is a good time to access the UK, as they are being “paid to wait” in the form of a “pretty healthy yield”, which is derived from lower starting valuations, bringing potential capital upside in the future.
Beesley added the investment landscape is “all about relativity” and at present, the UK is “relatively cheap versus lots of other markets”.