As the CEO of a leading financial services company, I know the worth of helping people achieve their financial dreams and aspirations. I know the daily motivations that drive people towards their goals, and witness first hand the barriers that hinder their progress along the way.
With that in mind, I firmly believe that the Conservative Party needs to use the upcoming Autumn Statement to position itself as the party of aspiration ahead of next year’s general election.
Rishi Sunak and Jeremy Hunt must implement measures that empower people to realise their financial potential and promote wealth creation, not only for personal prosperity but for the greater good of the United Kingdom. But how?
The first thing I would do is raise the annual ISA allowance to £30,000. The current allowance of £20,000 has been in place since 2017, but with inflation so high it’s failed to keep pace.
Everyone agrees that Britons aren’t saving enough – by raising the allowance we can incentivise Brits to invest more and invest more effectively. This move will not only make people richer but will also stimulate economic growth, as many such ISAs are invested into UK stocks and shares.
Raising the allowance would also serve as an antidote to the issue of Brits being taxed more on their savings as a result of high interest rates. Currently, you can earn up to £1k interest a year before you start paying tax on bank interest, which never used to be a problem for most savers when interest rates were much lower.
But it will catch a lot of people with interest rates at 5.25 per cent, so raising the ISA allowance could be communicated as a tax cut, something that would be celebrated by Tory backbenchers.
Second, I’d look to long-term savings. One of the Conservatives’ resounding successes over the past thirteen years has been boosting pension participation through auto-enrolment. More than 10.8 million people have been automatically enrolled since its inception, with private pension participation more than doubling.
However, to ensure that more people are adequately prepared for retirement and reduce the strain on public resources, there should be a gradual increase in the auto-enrolment contribution rate from the existing eight per cent to 12 per cent, bringing it in line with other developed nations.
This move is not just about personal wealth, which it will enhance greatly, but about securing the financial future of millions of Brits – especially vital in the face of uncertainty surrounding the long-term viability of the state pension and the triple lock.
Third, ministers should also look at ways to remove burdens on the side of business, not just consumers. Businesses are themselves drivers of social mobility and growth in the economy – when they are able to get on with it. After a tough few years for businesses that collectively employ the majority of British workers, it’s time to back them.
This means reducing the costs of doing business. Usually this is approached in terms of tax cuts, which of course I would support. But if that is not currently possible, the Chancellor should think in terms of reducing bureaucracy and form-filling requirements, particularly on SMEs, which are a direct cost to companies.
Finally, a financially-literate population should be a priority policy for any party championing individual freedom and economic aspiration. Yet, the UK ranks 15th out of 29 countries in OECD rankings for financial literacy. To weather financial turbulence, invest wisely, and ultimately achieve financial goals, Brits need to be better equipped with financial knowledge.
To do this, the Prime Minister should build on his reforms to make maths compulsory until the age of 18 by integrating financial education into the national curriculum and workplace training programs. Children should be taught practical skills that help them make informed decisions about saving, investing, and managing debt. My company is running our “On the Money” campaign to teach personal finance to 30,000 students in schools across the UK, but such private initiatives can never reach everyone.
I firmly believe that together, these measures can empower Brits to achieve their financial dreams, promote wealth creation and spur economic progress. I also believe that they would allow the Conservatives to start to win back the trust and support of voters. The British people are aspirational. The Government just needs to start removing the roadblocks to their success.