Flagstone boss: Labour tax changes the biggest driver of savers choosing cash over stocks and shares
Britain’s unpredictable tax landscape means households are choosing to build up war chests of cash over other assets like stocks and bonds, the boss of Britain’s largest savings platform has said in a blow to government efforts to boost retail investing.
Flagstone chief executive Arman Tahmassebi said his clients were adding to their cash savings at a record rate for fear of the government announcing sudden changes to wealth taxes on other asset classes, like capital gains or the rules around inheritance tax.
The uncertain fiscal environment outweighed customers’ fears of an impending stock market crash or debt crisis as a driver of their behaviour, he added.
“Our clients, looking at their recent behaviour, are actually more sensitive to risks in fiscal policy – and how taxes might affect those assets,” he told Morning Wire in an interview. “We see a lot of people, with uncertainty with what’s happening [over tax policy], keeping money in cash, liquidating assets and keeping it in cash because of that uncertainty.”
The remarks pour cold water on the efforts of Rachel Reeves’ Treasury to encourage savers to put more money into riskier assets. The Chancellor is preparing to launch a major advertising campaign to promote the benefits of retail investing to the British public, which will form a core pillar of her bid to revitalise the UK’s capital markets.
The campaign, which is yet to launch and is being fronted by a ‘savvy’ red squirrel, has already been plagued by setbacks, with reports suggesting member firms are frustrated missed the so-called ‘Isa season’ in early April.
Flagstone customers ‘looking to maximise’ cash Isa ahead of tax change
At last autumn’s Budget, the government also chose to slash the cash ISA limit from £20,000 to £12,000 in a bid to push savers into asset classes that stimulate economic activity, like stocks or bonds.
But Tahmassebi’s comments suggest those efforts are being undermined by the Treasury’s decision to avoid hiking any of the major taxes in favour of more substantial reforms to smaller levies. At her maiden Budget in 2024, Reeves raised capital gains tax and overhauled inheritance tax to remove several reliefs. She also ploughed ahead with previously announced plans to apply VAT to private school fees and abolish the non-dom regime.
Tahmassebi, who was speaking to Morning Wire after revealing Flagstone posted record revenue growth in 2025, said the move to cap contributions to the tax-free cash wrapper meant savers were “looking to maximise” their contributions before the limit comes into force next April.
The fintech boss said the savings platform, which with over £19.6bn of customer cash is the largest of its kind in the UK, enjoyed 16 per cent bump to revenue, which meant turnover was now more than four times higher than in 2022.
“It’s a real privilege to announce these results,” he said, adding: “We were able to achieve over £600m of interest for our clients in 2025 and that really relates to the strength of the proposition in being able to support our clients needs, in seeking a return as high as possible for their cash and and how they see their cash as an asset.”