TISA recommends Treasury increases consumer access to T-bill and gilt auctions
The Investing and Saving Alliance is recommending HM Treasury open UK gilt & T-bill auctions directly to retail investors in small denominations and ensure forthcoming ISA changes are consistent with this move to encourage consumer investment in this market.
TISA supports the Debt Management Office (DMO) and HM Treasury proposals to increase retail participation and would welcome the UK taking a similar approach to the US, where consumers can participate in auctions in very small denominations on the same terms as institutional investors.
At the same time, TISA is warning that HM Treasury risks working at cross purposes if ISA policy moves to restrict holding these investments in Stocks and Shares ISAs. TISA is concerned that proposals to reduce the Cash ISA limit – which may also introduce new complexity in Stocks & Shares ISAs – could dilute the impact of reforms designed to make T-bills more accessible to everyday savers.
Given current awareness and participation levels, TISA suspects the actual risk of consumers circumventing a reduced cash ISA limit by holding short-dated government bonds in Stocks and Shares ISAs is extremely low.
Sophie Legrand-Green, Head of Policy: Consumer Protection and Access, said:
“Opening auctions directly to retail investors would be a meaningful step forward for UK retail investing, allowing the average consumer to participate in the primary market in small denominations and invest in the future of their country. This would bring the UK closer to the kind of accessible model seen in the US, making it simpler for savers to invest with confidence in government debt.
However, for this reform to land as intended, ISA policy has to support it, not contradict it. If the reduction in the Cash ISA allowance adds new friction and complexity in Stocks & Shares ISAs by treating T-bills and gilts as ‘cash-like’, Treasury would risk blunting a policy designed to increase participation.
The overarching objective must be joined-up, evidence-led reform that removes barriers for consumers rather than creating new ones.”
Notes to editors
TISA has approximately 270 member firms involved in the supply and distribution of savings and investment products and associated services. Members include the UK’s major investment managers, retail banks, online platforms, insurance companies, pension providers, distributors, building societies, wealth managers, third party administrators, FinTechs, financial consultants, financial advisers, industry infrastructure providers and stockbrokers.
TISA’s full response is available on request.
TISA is a not-for-profit membership organisation committed to improving the financial wellbeing of all UK consumers by working collectively with the financial services industry to deliver solutions and champion innovation, for the benefit of people, our industry, and the nation.