Hunt to Overhaul ISAs this autumn

DoublePolaroid

This makes it seem like the people in charge have no idea why people don’t invest (besides folk not having enough money).

It’s not “ISA complexity” holding people back from using them. Many people don’t invest because they don’t understand investing; lots of particularly older folk grew up with the mindset that investing is gambling whilst a worryingly large number of younger folk think investing is a scam. Since none of the currently very vague proposals address these fundamental issues, I can’t see them making a dent in terms of the stated aims of increasing investment in U.K. companies nor increasing the utilisation of S&S ISA’s. 

Altior

Investing is gambling. Yes we're playing the odds, based over many years of history that tell us over the medium to long term, the drift is always up and beats inflation. However, that is not absolutely guaranteed. Many, many people don't have the capacity to handle losses of any description, let alone a material drop, so investing is not really for them.

It should not be government's place to nudge us into doing anything financial that involves individual personal risk. Create the platform, create the right incentives but don't meddle, don't actively manipulate. We only have to look over the last year or so and the widespread blubbing over mortgage interest rates normalising. So government does something to nudge financial incompetents into putting money into a S&S ISA, the following year the market corrects by 30%, the 'internet' would be demanding yet another taxpayer bailout (I would include within meddling, the encouragement of investment into a chosen area/form/type of equities over another). 

sevenhills

Altior said:

Investing is gambling. Yes we're playing the odds, based over many years of history that tell us over the medium to long term, the drift is always up and beats inflation. However, that is not absolutely guaranteed. Many, many people don't have the capacity to handle losses of any description, let alone a material drop, so investing is not really for them.

But people ignore that the last couple of years the value of their capital could be down over 10% if it's in savings accounts.
I would prefer to have the possibility of an increase than the certainty of a decrease.

barnstar2077

Too many young people today think that investing is what they have seen on Facebook and Youtube.   Namely people pimping meme / trendy stocks for their own gain, with no due diligence done by anyone involved.  With individual stocks bought and sold on apps on their phones, like betting on the game on the weekend (also a big problem for kids these days.)  And don't even get me started on the thousands of crypto currencies!

brucefan_2

Sea_Shell said:

I'd be interested in what they plan to do with IFISA's as I have a few quid in Loanpad, and have been very happy with them so far.   

I have also been happy with my Loanpad IFISA to date

boingy

barnstar2077 said:

Too many young people today think that investing is what they have seen on Facebook and Youtube.   Namely people pimping meme / trendy stocks for their own gain, with no due diligence done by anyone involved.  With individual stocks bought and sold on apps on their phones, like betting on the game on the weekend (also a big problem for kids these days.)  And don't even get me started on the thousands of crypto currencies!

It's not just on FB and YT. There are a couple of companies advertising on mainstream TV now, AJ Bell is one, can't remember the other. Both ads are "glamming it up" - lots of funky music and soundbites. It makes investing look like a Peloton session! It'll end in tears...

Swipe

boingy said:

It'll end in tears...

My thoughts exactly investing in UK stocks

zagfles

sevenhills said:

Altior said:

Investing is gambling. Yes we're playing the odds, based over many years of history that tell us over the medium to long term, the drift is always up and beats inflation. However, that is not absolutely guaranteed. Many, many people don't have the capacity to handle losses of any description, let alone a material drop, so investing is not really for them.

But people ignore that the last couple of years the value of their capital could be down over 10% if it's in savings accounts.
I would prefer to have the possibility of an increase than the certainty of a decrease.

Yes, and that's been the case for the last 15 years or so! At last the corner might be being turned, and we might get positive real interest rates at last for the first time since the FC in 2008, but people who've been in cash the last 15 years have been losing big time. 

Albermarle

Investing is gambling. Yes we're playing the odds, based over many years of history that tell us over the medium to long term, the drift is always up and beats inflation. However, that is not absolutely guaranteed. Many, many people don't have the capacity to handle losses of any description, let alone a material drop, so investing is not really for them.

I think the 'Loss Aversion' theory plays a big part. In general it is thought that a loss hurts twice as much as the pleasure from a win. Even more experienced investors feel it, but I guess they have learnt to steel themselves against reacting to it, and keep telling themselves that in the long run it will work out.

zagfles

Albermarle said:

Investing is gambling. Yes we're playing the odds, based over many years of history that tell us over the medium to long term, the drift is always up and beats inflation. However, that is not absolutely guaranteed. Many, many people don't have the capacity to handle losses of any description, let alone a material drop, so investing is not really for them.

I think the 'Loss Aversion' theory plays a big part. In general it is thought that a loss hurts twice as much as the pleasure from a win. Even more experienced investors feel it, but I guess they have learnt to steel themselves against reacting to it, and keep telling themselves that in the long run it will work out.

And judging by another thread here and others over the years, people just don't seem to comprehend what a loss is. If your investments don't keep up with inflation, that's a loss. Cash has been making a loss for 15 years. But some just don't see it.