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Savers with cash languishing in low-interest bank accounts are set to be inundated with offers to invest their money in stocks and shares under new government plans to encourage greater financial growth.

Banks will be required to send customers details of potential investment opportunities, and a large-scale advertising campaign will be launched to raise awareness of the benefits of investing over saving.

According to the Treasury, based on current trends, if savers were to move just £2,000 from a low-interest account into stocks and shares, millions of people could see an increase of more than £9,000 over the next 20 years.

Chancellor Rachel Reeves, speaking in Leeds ahead of her Mansion House speech to City leaders, said: "We need to double down on our global strengths to put the UK ahead in the global race for financial businesses, creating good skilled jobs in every part of the country and helping savers' money go further.

The government’s plan comes as an estimated 29 million UK adults hold cash in accounts that offer interest rates as low as 1%. Over the past decade, the average return for stocks and shares has been around 9%.

The Treasury’s figures suggest that a £2,000 investment today could grow to £12,000 over 20 years, compared to just £2,700 if it remained in a cash account offering 1.5% interest. This highlights a potential £9,000 difference for savers willing to switch.

For savers who are cautious about tax, the government allows up to £20,000 a year in tax-free savings and investments within an individual savings account (ISA). The Treasury is pushing to incentivise further investing by making it more accessible and promoting higher returns for savers.

However, with higher returns come higher risks. Historically, many savers have been reluctant to invest due to concerns over the fluctuating value of investments. In response, the Treasury has suggested that specific risk warnings on investment products might be revised. It said there would be a "review of risk warnings on investment products to make sure they help people to accurately judge risk levels".

An industry-led advertising campaign will explain the benefits of investing. From April 2026, the Financial Conduct Authority (FCA) will introduce Targeted Support, enabling banks to alert customers about specific investment opportunities. This will help shift money from low-return current accounts to higher-performing stocks and shares investments.

Economic secretary to the Treasury, Emma Reynolds said: "Helping people take advantage of better returns from investing is key to better financial health, giving them a stake in a growing economy and connecting promising businesses with capital. These reforms will make the UK the best location for financial services firms and tear down barriers to investment to growing our economy and making families better off.”

As part of the government's broader reform package, the Treasury also announced plans to allow long term asset funds (LTAFs) to be held in stocks and shares ISAs starting next year. This would enable individuals to invest in assets like innovative businesses and infrastructure projects, further diversifying investment options for UK savers.

The government has stated that it will “continue to consider reforms to ISAs and savings” to find the right balance between cash savings and investment, ultimately boosting both individual financial growth and the UK economy.

With these plans, the government hopes to encourage a shift from traditional savings towards investments that will benefit the wider economy, creating more opportunities for growth and financial security in the long term. However, critics warn that while the initiative aims to provide higher returns, it may expose more people to the risks associated with investing.

Reeves is also pledging to cut red tape, in a push to attract investment and drive growth. Under the ‘Leeds’ reforms just announced, “unnecessary financial red tape” will be “drastically cut”, the Treasury said.

"A new concierge service within the Office for Investment will harness UK networks globally to actively court international financial services companies, creating a one-stop-shop to promote the UK and provide tailored support to help businesses plan where to invest based on their needs – better harnessing specialist clusters across the country from asset management in Edinburgh, to Fintech in Leeds and Cardiff, and insurance in Norwich and Norfolk."