I’m always shocked at the price of an ice cream at the theatre.
No matter how many times it has caught me by surprise, I still do a sharp intake of breath as I either hand over four quid (four quid!!) for a tub of strawberry flavour – or show restraint and walk away. Don’t get me started on the theatre’s Maltesers inflation.
Everyone has different motivations for investing – the dream of a more comfortable retirement, helping others, or just for the extra freedom it affords you.
For me, it’s all the above – plus making sure that I can still go to the theatre – and occasionally treat myself to an ice cream if I fancy it.
Whatever reason you’re investing – or could be convinced to – I’d guess it’s not to drive economic growth. Yet, that’s precisely what the Chancellor wants us to do.
Speculation is mounting that Rachel Reeves may curb the cash Isa allowance as early as the next tax year.
Disservice to investing: Rachel Reeves sees tax-free cash nest eggs as an opportunity to create more growth by putting them to work in the stock market
At the moment, you can put cash or stocks and shares into your Isas in whatever proportions you choose – so long as you don’t exceed the £20,000 allowance.
My colleague Jeff Prestridge has the latest scoop; he suspects Reeves will cap the amount that you can save in a cash Isa at £4,000.
She sees tax-free cash nest eggs as an opportunity to create more growth by putting them to work in the stock market.
Unfair on cash Isa savers, yes. But also, a disservice to investing.
Forcing people to invest if they want to make use of their full tax-free allowance makes it seem like the booby prize. It’s anything but.
If you’d put £1,000 into a cash Isa when they were launched in 1999, you would be sitting on around £2,016.
That may sound good, but you’d be little better off than when you started with £1,000 in 1999 which would be worth £1,856 if adjusted for inflation.
Instead, if you’d put your £1,000 into a portfolio of companies from around the world in a stocks and shares Isa, you would now have £4,641, according to the figures from investment platform AJ Bell.
But I don’t know what could be more off-putting than being told by the Government what to do with your money. Or being told that it’s for the sake of the economy.
We must teach people how to invest
If she wants more people to invest, there are easier ways than taking it out on the cash Isas. One – improve financial education in schools and two – help more women invest.
At an event at the House of Lords last week, hosted by AJ Bell, financier Baroness Morrissey revealed that of her nine children ‘precisely zero remember ever receiving financial education’.
‘Two of them are still at school. A couple of the boys belong to an investment club, but it’s only offered at the boys’ school. And it has been on the curriculum since 2014,’ she says.
If money lessons in school were less patchy, the prospect of investing later in life might feel much less daunting.
Rather than talking down cash Isas, we should be talking up stocks and shares Isas – celebrating the fact that we have homegrown companies that make it as easy to invest as to save in cash.
Male-centric: Even finance films such as The Wolf of Wall Street portray women in a ‘disappointing’ way, according to a study by academic Dr Ylva Baeckstrom
It’s time to face up to another uncomfortable truth: if there’s one group in particular that prioritise cash over investing, it’s women. There are around a million more women with cash Isas than men, but men have nearly 500,000 more stocks and shares Isas than women.
That in part explains why men’s Isas are worth £3,000 more than women’s – amounting to a gap of £6.6 billion, according to AJ Bell.
If women shifted their cash holdings into investments, disparity between genders would close, working in favour of achieving the Chancellor’s ambitions.
The answer is not simple – and certainly doesn’t involve patronising women or blaming them for not investing more.
Dr Ylva Baeckstrom, Senior Lecturer in Finance at King’s Business School, has researched this issue for years and has interesting ideas about what could be improved.
She carried out a study with investing platform eToro to analyse major films and series about finance and investing from the past 15 years – such as The Wolf Of Wall Street and The Big Short – to quantify how male-centric their narratives are.
She found 75 per cent of screen time in such films and TV series were occupied by men, with women relegated to roles as wives, mistresses and assistants.
‘These on-screen depictions, while sadly unsurprising, are deeply disappointing and have a potentially disastrous impact on society,’ she says.
‘We all know that women earn less, invest less, yet live longer than men and therefore have an even greater need to build wealth and secure their futures.’
Dr Baeckstrom tells me that in another investigation, she found that financial advisers give more cautious advice to women than men – even if their circumstances are exactly the same.
Clearly the solutions here are not straightforward, and change will take time.
But if she wants more of us to invest, the Chancellor can help as a role model herself. She could champion investing and celebrate the opportunities. Sadly, I think the chance of that happening is as slim as a cheap theatre ice cream.
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