Mobilising Britain's Savings for Productive Investment

My name is Alban Bala and I am an affiliate partner of FTI Consulting Inc. of London, as well as founder of List4Free Ltd -( www.list4free.co.uk), a UK prop-tech company.

Earlier I tried to communicate this idea also with Lord Jason Stockwood, before he walked out of the Ministerial position.

What I gave myself the liberty to send to him was a humble proposal on how to boost FDIs but also domestic investments, by making leverage on the fact that UK holds ca. £2 trillion in bank deposits.

My vision foresees a way how to redirect a modest, voluntary share of excess cash savings toward productive, diversified investments, while preserving deposit safety, banking stability and savers’ freedom.

What I would propose is a National Productive Capital Strategy targeting perhaps 5% of the deposit base over five years. On an assumed £2 trillion base, this would mobilize approximately £100 billion, or around £20 billion annually.

I would envisage the establishment of a National Productive Savings and Investment Program.

The first layer of household savings should remain liquid and protected. A practical policy could define an indicative “safe cash reserve”—for example, six months of household expenditure—while directing investment incentives principally toward balances above that level.

The most important retail instrument would be a simple, tax-efficient National Productive Savings Account, operating alongside ordinary bank deposits.

It could offer savers several regulated options:

1. Conservative fund: mostly government, infrastructure and investment-grade corporate bonds.
2. Balanced fund: bonds, listed equities, infrastructure and property-related assets.
3. Growth fund: listed companies, private equity, venture capital and innovation finance.
4. Regional fund: investments connected to particular regions, cities or industrial clusters.
5. Green transition fund: energy networks, renewables, housing efficiency, transport and clean industry.

The account should have low and transparent fees, diversified portfolios rather than individual project exposure, clear risk classifications, a periodic valuation, portability between licensed providers and no government promise that these investments cannot lose value.

For smaller savers, the state could provide a modest matching contribution—for example, matching the first £500 or £1,000 invested annually—rather than granting large tax advantages mainly benefiting wealthy households.

Surely, investment products would need to be built before trying to mobilise savings.

The country needs a pipeline of credible projects with planning permission, reliable revenues, professional management, transparent procurement, suitable risk allocation, realistic construction costs and measurable economic returns.

I would eventually establish a National Project Preparation Facility to convert public priorities into investable propositions and bankable projects.

The government may use a relatively small amount of public risk capital to attract larger amounts of private capital. It can establish a MIGA (World Bank) like instrument to guarantee the equity of strategic investors.

A similar example is the current UK National Wealth Fund model, which uses loans, equity, mezzanine finance, credit enhancement and guarantees, mobilising approx.. £3 of private capital for every £1 of public capital.

Applied cautiously, a £10–15 billion public guarantee and risk-capital envelope could aim to mobilise around £30–45 billion of private investment.

Such an intervention would benefit also to the banks – transforming their lending rather than weakening their regulation.

The government, municipalities and regulated project companies could issue accessible bonds for specific investments such as national energy-grid bonds, municipal regeneration bonds, affordable-housing bonds, water infrastructure bonds, transport bonds, etc.

Retail denominations could start at £100 or £500. Bonds could be distributed through banks, investment platforms and the proposed Productive Savings Account. However, I would avoid the word “national” which would give risky investments the appearance of guaranteed deposits.

The tax system should also reward patient investment without creating excessive complexity.

Possible measures may include an annual productive-investment allowance, a tax-free reinvestment of returns held for five or more years, inheritance-tax relief only for genuinely productive, long-held investments, reduced tax advantages for very large passive cash balances, loss-offset rules for diversified investment funds and tax neutrality between competing regulated investment providers.

Investment education should emphasise that higher expected returns mean higher risk, and that a five- or ten-year investment should not be funded from emergency savings.

A realistic ambition would be to mobilise £100–150 billion over five to seven years, while using perhaps £10–20 billion of carefully controlled public risk capacity to crowd in additional capital. The proposal rests on a distinction between the existence of savings and the capacity of an economy to transform those savings into productive investment.

Allow me to thank you in advance for reading these modest notes of mine, while I hope you may also post them at MANIFESTO 1.0, where I also subscribed.

Dear regards,

Alban Bala