InvestEngine writes that it remains the fastest-growing investment platform in the UK, boasting a 117.6 per cent growth this year, significantly outpacing competitors.
The firm writes that demand for ETFs from investors remains high and the benefits they unlock are clear, but with the Autumn Budget just weeks away, announcements on investments, pensions and ISAs could mean investors will face some big decisions in the future.
InvestEngine is the fastest-growing investment platform in the UK for 2024 so far, achieving a 117.6 per cent growth, according to Fundscape, and maintaining its lead from 2023. In Q2, InvestEngine broke into the top 10 investment platforms by asset growth, coming in eighth out of 21 investment platforms.
In Q2 alone, InvestEngine led the sector with a 53 per cent increase in assets, bringing its total assets under management (AUM) to GBP674 million—a growth of GBP233.5 million in just three months. This significantly outpaced competitors, including the UK’s largest investment platform by assets under management in Q2, which only grew by 3.5 per cent, the firm says.
Andrew Prosser, Head of Investments at InvestEngine, says: “Aside from InvestEngine’s ease of use and low fees, one of the driving forces behind our remarkable growth is the rising popularity of ETFs. InvestEngine’s focus on this diversified, low-cost form of investing is meeting the needs of both novice and experienced investors looking for the best way to grow their long-term wealth.
“ETFs enable investors to put their money in diversified, low-cost funds over a long period. Rather than trying to pick the best-performing shares in the stock market — which even experienced professionals struggle to do — ETFs allow you to invest in every share in your chosen market. ETFs also mitigate against risks that come with buying individual shares, which are volatile. With ETFs, you’re buying into funds which typically hold hundreds of different shares or bonds, spreading the risk.
“At InvestEngine, we offer both a DIY portfolio option, which allows more experienced investors to cherry-pick funds for themselves, or a professionally managed portfolio, where our experts build and manage portfolios for less experienced investors at a low cost.”
Autumn Budget speculation: implications for investors
As Labour prepares to deliver its first Budget in 14 years on 30th October, speculation is rife regarding its impact on investors. Both Prime Minister Keir Starmer and Chancellor Rachel Reeves have looked to temper expectations, noting the need to prioritise shoring up the country’s public finances.
While the government has committed to not raising the three main personal taxes — income tax, National Insurance, and VAT—other tax areas remain under consideration, including capital gains and inheritance tax. Changes to ISAs, a popular investment vehicle for so many, could also be on the table.
Labour has already confirmed plans to scrap the British ISA, first announced by the previous Conservative government, which has fuelled speculation over further potential ISA simplifications, such as merging cash and stocks and shares ISAs into a single account. InvestEngine has previously advocated for such simplification, as highlighted in its Building a Nation of Investors report. There is also talk of a lifetime cap on ISAs being introduced, possibly as low as GBP100,000.
Andrew Prosser, Head of Investments, says: “As the Budget approaches and if speculation is correct, many investors would welcome simplifications to the ISA system that would make it easier for more people to invest their savings in ways that could lead to higher long-term growth. But other rumoured changes, such as a cap on how much money investors can hold in their ISAs over their lifetime, would fundamentally change the ISA landscape.
“Whatever the Chancellor decides to do regarding ISAs, the government must ensure clarity around the rules and keep investors up to date on potential changes and the implications it could have for them, so they can make informed decisions about their long-term investments.”
Ahead of the Autumn Budget, InvestEngine wrote to the Chancellor, urging action in several critical areas:
Closing the Advice Gap: InvestEngine research found that 48 per cent of UK adults recognise the benefits of long term investing but find it too complex. InvestEngine has urged the Treasury and Financial Conduct Authority (FCA) to work to create accessible, affordable advice options to help more individuals make informed financial decisions.
Addressing the Tax Trap: Over 586,000 individuals currently face a punitive 60 per cent tax rate due to the personal allowance and 40 per cent tax rate interact. InvestEngine wants to see a solution, whether by reforming the system directly or providing clearer guidance to at-risk individuals through employer notifications about their tax status and options to adjust pension contributions to mitigate the impact.
Clarifying Fractional Shares: Following last year’s announcement about allowing ‘certain’ fractional shares as eligible ISA investments, we have yet to get clarity on which shares qualify. This assurance is important for providers and customers alike in giving certainty over investment decisions.
