The trading platform IG Group supports Reeves regarding restrictions on cash ISAs, according to Money News.

IG Group, a trading and investment platform based in London,

has defied industry competitors by supporting Rachel Reeves’ proposal to revamp Britain’s most popular savings product.

Sky News has seen a letter from Michael Healy, the UK managing director of IG Group, in which he argues that cash ISAs “have become too popular relative to their economic utility, serving as the default for savings for too long despite delivering poor long-term returns and contributing little to productive investment or personal wealth accumulation.”

Their letter to the chancellor was sent earlier this week, days after rival AJ Bell criticised the Treasury’s move to reduce the Cash ISA limit from £20,000 to £12,000 next year, saying the proposals are “doomed to fail” in their aim to encourage more people to invest over the long term.

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A heated meeting last week between industry players and officials from the Treasury and HM Revenue and Customs saw a flood of criticism of the proposed reforms.

However, Mr Healy, whose company has about 900,000 customers in the UK, said the rivals’ views “symbolise the deep reluctance within parts of our industry to embrace change, even when the status quo clearly fails the majority of UK people as well as the economy.”

“Despite the long-term effectiveness of existing structures, there remains a strong tendency to protect them,” Mr Healy wrote.

He argued that cash ISAs should be scrapped altogether rather than having their annual allowances cut.

And he said that industry colleagues are deliberately misrepresenting the intention of the government’s proposals.

“The suggestion that the reforms will switch people to cash ISAs before the changes misses the basic point.

“Policy changes are absolutely necessary to change this balance, and savers are not left without options – premium bonds remain available, and old savers, who formed the main basis of the argument against ISA allowance cuts, have been allowed to retain the £20,000 limit.”

“We are also worried about how strongly the industry is pushing back against dealing with the problem of uninvested cash in stocks and shares ISAs,” he wrote, responding to a major concern from senior industry leaders, who have said that taxing cash balances in non-cash ISAs could completely ruin their appeal as a tax-free savings option.

“This is a solvable challenge,” Mr Healy wrote.

“With clear, proportionate rules that distinguish between transactional cash and long-term dormant balances, and with the reporting burden on platforms and HMRC rather than consumers, this problem need not be a barrier.

“We reiterate our belief that ISA wrappers should, over time, be reserved for stand-alone investments.

“This will deliver the simplicity that critics of reform often seek, but with an alignment of incentives that better serves savers, investors and the UK economy.

“We strongly encourage the government to not only remain patient, but also move forward to reallocate tax-advantaged savings towards long-term investment.”