City workers are receiving bumper bonuses this season, with more than half expecting larger payouts and one in three set to receive six or seven-figure sums. Rather than splashing out, most plan to invest their windfalls, with stocks-and-shares Isas being the top priority before the tax year deadline on April 5.

Chancellor Rachel Reeves has unveiled plans to restrict cash holdings in investment accounts from 2027, aiming to encourage more Britons to build wealth through stocks. However, her timing is questionable as market volatility has driven investors to the safety of money market funds, which now account for five of the top ten funds purchased on Fidelity's platform.

The investment industry is lobbying against these restrictions, arguing that cash remains a vital portfolio tool. For new investors and those nearing retirement goals, having appropriate cash buffers to manage market volatility is sensible. Rather than penalizing cash holdings, policymakers should focus on encouraging that first crucial step of getting money into investment accounts.