- Reports suggest the government has parked plans to sell its stake in NatWest to the public following Rishi Sunak’s surprise election announcement last week (Source: The Times)
- Abandoning the sale altogether would be a ‘missed opportunity’ to encourage more people to invest for the long term
- Government currently has a stake in NatWest of just under 27%
- Selling the shares at a 10% discount to today’s market price would raise around £6.5 billion
Dan Coatsworth, investment analyst at AJ Bell, comments:
“Reports suggest the government has postponed the public offering of its shares in NatWest while it focuses on the general election. The government’s timetable for a sale to begin this summer has been derailed by Rishi Sunak’s announcement of a snap general election on 4 July, marking a missed opportunity to encourage more people to develop a long-term saving and investment habit.
“The government offering its NatWest shares below market price could have encouraged more people to buy shares for the first time. While many adults aged 22 or older already put money into the stock market via a workplace pension thanks to the auto-enrolment scheme, a much smaller number of individuals will have bought shares directly.
“Getting some experience through the purchase of NatWest shares might have been the first step to fostering a longer-term habit of putting money into the market on a regular basis beyond workplace pension contributions. It’s important to build up a pot of money to pay for life’s big events as it means the individual could be more prepared to meet the costs when they arrive. Even investing small amounts over time can make a big difference down the line.
“Investing is much easier than many people realise, with investment platforms making it straightforward to invest in shares and funds, at low cost, managed on your phone or computer. With both parties keen to incentivise people to invest in the UK stock market, hopefully initiatives such as the NatWest sale remain on the table after the election.
“It is not clear whether the Labour Party would proceed with a similar offer if they won the election but if Keir Starmer and Rachel Reeves end up at the helm of the next government, it is vital they revisit the potential sale.
“It could also be a straightforward way to raise a significant amount of money. The Treasury currently owns 26.95% of the bank. Selling the shares at 10% discount to the current market price of 310.9p* would raise approximately £6.5 billion.”
*At the time of writing on 28 May 2024.
