Chancellor John Healey should use his first Budget to give savers more reasons to invest in UK companies, according to London Stock Exchange chief executive Julia Hoggett.
Speaking at the 2026 AIC Investment Showcase, she said: “We have a brilliant engine [in the UK stock market] – we just need to put more of our own capital through it and that means incentivising our own capital, too.”
However, Healey faces a difficult balancing act on 28 October. He needs to raise revenue and shore up confidence in the UK economy, while inflation stays stubborn and interest rates look set to remain higher for longer.
Hoggett’s argument is that channelling more domestic savings into UK companies will boost growth across the wider economy. With this in mind, she has three big asks of Healey for the Budget.
The first is to bring back a dividend tax credit. Dividends from UK shares used to come with a notional 10% tax credit attached, which meant basic-rate taxpayers owed no additional tax on that income and higher-rate taxpayers paid a reduced rate.
Former chancellor of the exchequer George Osborne abolished it in 2016, replacing it with a tax-free dividend allowance that has since been cut to £500 a year.
“The way I would suggest bringing it back is to [implement] a 10% credit and make it apply to 25% of the portfolio,” she said.
“Say you have 35% of your portfolio in UK equities, then you would pro-rata the credit back down to 25%, because we do have to be pragmatic about the actual cost to the exchequer.”
Next, Hoggett suggested that those who keep at least 25% of their pension savings invested in UK assets for 15 years before those savings can be accessed should be able to pass on that pension pot free of inheritance tax.
“Because if you are backing Britain in your investing, then you should get a break for that,” she said.
Finally, Hoggett has proposed that stamp duty – the tax paid when buying UK shares – is removed for pension funds and ISAs, rather than scrapping it entirely.
Under existing rules, investors must pay 0.5% tax when they buy London-listed stocks – but there is no such levy when they buy overseas shares. This means that investors can trade and invest in big US stocks like Nvidia or Apple free of charge, yet equivalent investments in London-listed names such as HSBC or Rolls-Royce will be taxed.
“There is no point incentivising domestic investment in our pensions and ISAs and then taxing it at the same time,” she said. “That’s like holding the handbrake on while simultaneously putting your foot on the accelerator – and that just burns out the engine.”
Hoggett said stamp duty is “the cheapest tax this country has to collect”, because it is “straight-through processing, for the most part”, and abolishing it entirely could cost the government up to £4.5bn a year in receipts, which would be a “big haul to take away in one fell swoop”.
By limiting the exemption to pensions and ISAs, Hoggett forecasts this would cost the government less than £1bn in tax revenue annually.
“It could unlock around £120bn into UK equities over the next six years from 2027,” she added. “The benefit of this is that it would force investment now but it wouldn’t have a fiscal hit until 2042. Hopefully, by that stage, the economy will look considerably different because we will have started backing ourselves as a nation.”
Hoggett believes these changes could go some way to incentivising UK investors to invest more domestically. But, more broadly, the London Stock Exchange chief was clear that more work needs to be done to ensure Britons feel more optimistic about the UK equity market.
“We’re third in the world at starting companies, third in the world at scaling companies and usually third in the world at creating unicorns which, considering the size of our economy, is massively batting above our weight,” she said.
“We just need to get out of our own way and culturally back ourselves as a nation. And we need positive incentives to do so.”
As head of an exchange with a 300-year history, Hoggett was clear about what the market is there to do.
“The object of an equity market is to bring together those with capital and those who need capital,” she said.
“And I don’t know about you, but I’d much rather my tax revenue went on backing the future growth of our economy than on exporting our capital to back other economies.”