Chancellor Rachel Reeves has announced a series of initiatives under her “Leeds Reforms” named after the city where they were revealed with the goal of establishing the UK as the leading global hub for financial services by 2035.
One key measure is allowing Long-Term Asset Funds (LTAFs) to be included in Stocks & Shares ISAs a move that has drawn mixed reactions across the investment industry. LTAFs, known for their illiquid assets, have long been a contentious product.
Initially designed for pension schemes and high-net-worth or sophisticated investors, LTAFs became the subject of broader consultation by the Financial Conduct Authority in 2021, which considered their suitability for retail investors.
Schroders launched the UK’s first LTAF in 2023, but adoption has been slow, with only 31 such funds currently on the market.
Until now, LTAFs were only permitted in niche investment vehicles like innovative finance ISAs. When retail-accessible versions emerged in 2023, industry experts raised concerns that investment platforms could struggle with their distribution largely due to the notice periods involved, which contrast with infrastructure built around daily trading.
While Hargreaves Lansdown had previously acknowledged those challenges, the firm welcomed Reeves’ announcement on 15 July. Susannah Streeter, head of money and markets and global financial commentator at the company, voiced strong support:
“Changing ISA rules to include LTAFs in mainstream ISAs will unlock significantly more investment opportunities — while existing FCA safeguards ensure they remain a suitable portion of a diversified retail portfolio,” she said.