IG Group Breaks Industry Ranks to Support Chancellor's ISA Overhaul
In a significant break from industry consensus, the London-listed trading and investing platform IG Group has publicly backed Chancellor Rachel Reeves's controversial plans to overhaul Britain's most popular savings product. The company's support comes as a stark contrast to widespread criticism from rival financial firms regarding proposed reforms to cash Individual Savings Accounts (ISAs).
Executive Letter Argues for Phasing Out Cash ISAs
Michael Healy, the UK managing director of IG Group, has written directly to the chancellor arguing that cash ISAs should be phased out entirely rather than simply having their annual allowance reduced. In his letter, seen by Sky News, Healy contends that cash ISAs "have become too popular relative to their economic utility" and have served for too long as the default savings option despite delivering poor long-term returns.
Healy's correspondence represents a notable departure from the industry's predominant stance, particularly following rival AJ Bell's recent criticism of Treasury plans to cut the cash ISA allowance from £20,000 to £12,000 next year. AJ Bell had previously described the proposals as "doomed to fail" in their aim of encouraging more long-term investment.
Industry Resistance and Diverging Views
The IG Group executive's intervention follows a heated meeting last week between industry representatives and officials from both the Treasury and HM Revenue and Customs, during which the proposed reforms faced substantial criticism. Healy, whose company serves approximately 900,000 UK customers, suggested that rivals' opposition reflects "a deeper reluctance within parts of our industry to embrace change, even when the status quo is demonstrably failing most people in the UK as well as the economy."
He further argued that there remains "a strong instinct to defend existing structures, irrespective of their long-term efficacy" within the financial sector.
Addressing Industry Concerns and Mischaracterisations
In his detailed letter, Healy addressed several key concerns raised by industry peers, including suggestions that the reforms might inadvertently drive more people into cash ISAs ahead of implementation. He countered that "policy nudges are exactly what is required to shift this equilibrium" and emphasised that savers retain alternative options, including Premium Bonds.
The IG Group executive also highlighted specific provisions within the proposals, noting that older savers—who formed the main basis of arguments against cutting ISA allowances—have been permitted to retain the higher £20,000 limit.
Focus on Uninvested Cash and Long-Term Solutions
Healy expressed particular concern about "the strength of industry resistance to addressing the issue of uninvested cash sitting in Stocks and Shares ISAs." This addresses a principal complaint from senior industry figures who have argued that taxing cash balances in non-cash ISAs could undermine their positioning as tax-free savings vehicles.
The IG Group managing director proposed that this challenge is solvable through clear, proportionate rules distinguishing between transactional cash and long-term idle balances, with reporting responsibilities placed on platforms and HMRC rather than consumers.
Call for More Ambitious Reform
Healy concluded his letter with a call for more ambitious reform, stating: "We reiterate our belief that the ISA wrapper should, over time, be reserved for investments alone. This would deliver the simplicity that critics of reform frequently claim to want, but with an alignment of incentives that better serves savers, investors, and the UK economy."
He strongly encouraged the government "not only to hold its nerve but to go further in recalibrating tax-advantaged savings towards long-term investment," positioning IG Group as a rare industry voice supporting substantial structural change to Britain's savings landscape.
