By Steve Conley | 25 July 2025
If a regulated financial adviser made the claims Rachel Reeves has just made about ISA returns, the Financial Conduct Authority (FCA) would likely uphold a complaint against them for misleading financial promotion. If not the FCA, the Advertising Standards Authority (ASA) would surely step in. But when it’s the Chancellor of the Exchequer, it seems the rules are different.
Last week, as part of her Leeds Reforms, Reeves unveiled plans to boost investment by encouraging savers to move their cash from low-interest savings accounts into the stock market. In doing so, the Treasury released projections suggesting that £2,000 invested could grow to £12,000 over 20 years—compared to just £2,700 if left in a 1.5% savings account.
Sounds great on paper. But here’s the problem: the numbers don’t hold up under scrutiny—and in regulated circles, they’d be classed as unfair, unclear, and misleading.
A Standard No Financial Adviser Could Get Away With
To achieve £12,000 from a £2,000 investment over 20 years, a saver would need a consistent compound return of 9.37% after charges, or over 10.3% gross annually. That’s more than even the most optimistic long-term market forecasts suggest, especially once you factor in fees, volatility, and inflation.
The FCA’s own guidance to the industry requires financial firms to project outcomes using standardised growth rates:
- 2% (low)
- 5% (intermediate)
- 8% (high)
Using those assumptions, Aegon estimates the best-case outcome should be £7,739—not the £12,000 promoted by the Treasury.
Would a regulated adviser be permitted to present only the top-end, unqualified return projection in isolation? Absolutely not. They’d be slapped with an enforcement notice for breaching COBS 4.2.1R: “A firm must ensure that a communication or financial promotion is fair, clear and not misleading.”
Misleading by Omission and Comparison
Reeves compared investing to holding cash in a high street savings account paying 1.5%. But she conveniently ignored the fact that online banks and savings platforms offer far higher rates—often over 4.5%.
So while her point about long-term investment benefits is directionally sound, the comparison is deliberately skewed, failing to present the full range of savings options available to consumers.
Sarah Coles of Hargreaves Lansdown put it diplomatically: “They could have provided a more holistic view.”
But in advertising, it’s not diplomacy that counts—it’s accuracy. In this case, Reeves’ messaging would fail the ASA’s requirement for balanced, substantiated comparisons.
Financial Propaganda Masquerading as Reform
This is not just about faulty figures. It’s about a government increasingly comfortable playing fast and loose with financial truth, in a desperate bid to revive growth and confidence in UK markets. We’ve already seen Reeves attempt to intervene in court cases to limit bank liabilities. Now she’s promoting projections that wouldn’t pass regulatory scrutiny in any other context.
If the Chancellor truly believes in empowering savers, she should hold herself to the same standards she expects from the rest of the financial sector.
What’s at Stake: Trust
Trust in financial guidance is fragile. Once broken, it’s hard to repair. If consumers are nudged into riskier products based on overstated returns, and those expectations aren’t met, the fallout will be significant—not just for portfolios, but for public confidence.
The reforms we need must be grounded in truth, transparency, and empowerment—not optimistic extrapolations and misleading nudges.
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