Rachel Reeves is reportedly mulling reducing the amount Brits can save in Cash ISAs, but would such a move actually foster economic growth? Our experts set out the pros and cons in this week’s Debate

YES: At over £2 trillion, Brits save far too much in cash

ISAs receive over £9bn in tax benefits per annum, which is sizeable in the context of the government’s need to meet its fiscal rules. As such, we should be questioning the value of this tax benefit to both individuals and the cobuntry. Does it really make sense to incentivise people to keep their money in cash?

Note this is not rainy day money, this is £20,000 per annum of savings. A limit of £5,000 on the Cash ISA would ensure that people can still save for a rainy day and would encourage investment into higher returning assets. Surely it is far better to encourage investment in shares, which over any meaningful time period materially outperforms the returns on cash. The issue in the UK is not that we save too little in cash, it is that, at over £2 trillion, we save far too much, which means that there is a lack of investment in growth assets.

At the same time we should review the Stocks & Shares ISA. Does it make any sense to give tax incentives to investors to fund the growth of overseas........

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