Government to develop easy-to-compare savings products

| August 2, 2012 | 0 Comments
Government to develop easy-to-compare savings products

Following a two-year consultation, the Treasury is planning to develop a range of savings products that would be offered by different providers.

All providers would offer the same terms and conditions on the products but would compete on price, service and value, making it easy for customers to compare the products.

The proposals, which are part of the Sergeant Review of Simple Financial Products, would initially cover easy access savings accounts, 30-day notice savings accounts and life cover.

The initiative aims to create a simple brand, which would be eligible for a kitemark to give consumers confidence in the range.

As well as being easy to compare, the products will be easy to understand, buy and maintain.

It is hoped that the proposals will restore public trust in financial products and encourage people to save.

Mark Hoban, financial secretary to the Treasury, said: “The government is committed to putting the consumer back at the heart of the financial system, but we understand that restoring public trust in financial products is not an easy task at the moment.”

“Simple financial products offer a unique opportunity to demonstrate that products can both be easy to understand and meet customers’ most important financial needs.”

A final report on the plans will be published in February following a consultation period with banks, building societies and insurers.

The proposed products are expected to benefit 15.5 million households with incomes between £15,000 and £50,000.

Households with higher incomes than this are more likely to enlist the services of a financial adviser.

Meanwhile savers are facing the possibility of lower easy-access account returns if the Bank of England reduces the base rate to a 318-year low of 0.25 per cent.

The Bank is expected to cut the rate in an effort to boost the economy, which is in a double-dip recession.

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