MPs say tax system penalises UK shares while £610 billion sits in savings accounts
Key Points
- A House of Commons Business and Trade Committee report published on 7 June 2026 says an estimated £610 billion held in UK cash savings accounts is earning below-inflation returns.
- The report cites a 2024 Barclays estimate that 15 million UK savers held more than £610 billion in cash, more than is held in equities or bonds.
- UK shares carry a 0.5% Stamp Duty Reserve Tax on transactions over £1,000, while US shares and AIM-listed shares are not charged; the duty raises £5.3 billion a year.
- The committee recommends the Treasury evaluate exempting ISAs from the tax, making relief for newly listed firms permanent, and abolishing the charge for UK-listed firms.
- Chair Liam Byrne said Britain is "not short of money" but lacks the institutions to put savings to work.
A cross-party committee of MPs has said an estimated £610 billion held in UK cash savings accounts is earning below-inflation returns, and has called on the Treasury to review the taxes that it says discourage savers from investing in UK shares.
The finding is contained in “Investing in the UK economy”, the first report of the 2026–27 session from the House of Commons Business and Trade Committee, published on Sunday (7 June).
The committee said that while UK pension funds steward around £3 trillion in long-term savings, much of the country’s savings sits idle or is invested abroad.
It cited a 2024 Barclays estimate that 15 million UK savers held more than £610 billion in cash, a figure the bank said outweighed savings invested in equities or bonds. According to HM Revenue & Customs data cited in the report, UK ISAs held £511 billion in stocks and shares and £360 billion in cash in 2023–24.
The report said the tax system treats investment in UK shares less favourably than investment in international shares. Stamp Duty Reserve Tax, introduced in 1986, applies a 0.5% charge to transactions over £1,000 in shares in UK companies, but is not levied on shares in US companies or on shares listed on the Alternative Investment Market.
Ministers told the committee that stamp duties on UK shares raise £5.3 billion a year.
Giving evidence to the inquiry, BlackRock’s Sandra Boss said an investor buying a UK share pays 0.5% stamp duty “right off the top”, while buying a US share costs nothing.
The committee said it was “not convinced” that taxing purchases of UK shares at the current rate was the wisest way to raise revenue, adding that the charge has a negative impact on investment in UK firms.
The report noted that the 2025 Autumn Budget introduced a three-year relief from the tax for newly listed UK shares, which the committee described as a partial and temporary measure.
Digital bank Monzo had suggested a permanent stamp duty holiday for newly listed firms, while the London Stock Exchange Group proposed exempting trading within ISAs at an estimated cost of £85 million a year.
The committee recommended that the Treasury commission an evaluation of the net benefits of exempting ISAs from the tax, making the relief for newly listed companies permanent, and abolishing the charge for UK firms listed on UK equity markets to equalise the treatment of domestic and international investment.
The report drew a comparison with Sweden, where flat-taxed ISK investment accounts introduced in 2012 have attracted nearly 4 million accounts holding around £135 billion in assets.
Liam Byrne MP, chair of the Business and Trade Committee, said Britain was “not short of money” but “short of institutions capable of putting that money to work”.
He noted that the UK held £3 trillion in pension assets, £264 billion of undeployed investment capital and £610 billion in cash savings accounts, yet 380,000 businesses that wanted finance could not get it.
