Govt to launch consultation on "simple products"
Share
The Government has confirmed that it will develop a new range of “simple products”, with the first consultation paper due to be published by the end of this year.
Speaking at the first Consumer Financial Education Body conference in Cambridge today, Financial Secretary to the Treasury Mark Hoban said the products will be developed in conjunction with consumer groups and the industry.
He said: “Simple products will help everyone to make better choices, and we particularly intend them to help encourage saving.
“I realise that there has been some controversy around simple products in the past and I want to reassure you that we are determined to avoid making the same mistakes as the last Government.
“So we will work closely with representatives from across consumer groups and industry to ensure that the products developed are viable for industry and attractive to consumers.”
Hoban said the Government will publish the first high level consultation on simple products by the end of this year, adding that officials will be working closely with interested parties in the run up to the consultation.
He said: “As well as developing simple products, we want to improve existing products that work well. The main savings product the Government has in place is Isas and over 17 million people now hold cash Isas. We want to make sure that Isas are as simple, transparent, competitive and flexible as possible.”
Hoban said there will be personalised interest rate information on cash Isa statements by early 2012 at the latest and providers will have to complete transfers within 15 working days from the end of this year.
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
View results 10 per page | 20 per page
Readers' comments (14)
Sandler is suite | 14 Jul 2010 2:51 pm
Here we go again... the Hoban Suite of products.
S226, PPP, PEP, TESSA, Stakeholder, ISA...
What next? HOBNOBS?
Unsuitable or offensive? Report this comment
Anonymous | 14 Jul 2010 3:23 pm
Dear, oh! Dear. When will those in the` don't know' allow those in the `do know' to get on with the job?
Unsuitable or offensive? Report this comment
Bob Perry | 14 Jul 2010 3:27 pm
When will Governments learn? If it is a choice between putting money away for a rainy day or the latest must have peice of technolgy, most people will choose the latest peice of technology for their home. No matter how simple the product the vast majority will not save.
By all means put pressure on the banks to deal with cash ISA transfers quickly and to advise customers when their headline interest rate has expired, but you cannot make equity based investments simple. The majority of consumers will need advice. If advice is required it has to be paid for.
As I and many others have said before, RDR will disenfranchise a whole sector of society from advice. Simple products will not help to fill the savings gap.
Unsuitable or offensive? Report this comment
andy newman | 14 Jul 2010 3:36 pm
as a product provider I can hardly wait to read biblical quantities of consultation documents, make trips to London to do the governments work for it, & persuade by backers to stump up project and developement costs and then see all the hard work wrecked atan election or handed on a plate to their mates the banks.
Any government assurances on long term existence of an initiative and profitability for us are now worthless that to fandagos on Sandler, Child Trust Funds, Savings Gateway, pensions ad nauseam.
Unsuitable or offensive? Report this comment
Tom IFA | 14 Jul 2010 4:09 pm
So we have simple products that are the same from all providers at exactly the same factory price with underlying funds managed by Niel Woodford + the other usual few suspects.We advisers must first tell clients if they can afford to invest, this is then checked by our compliance department who will at some time be checked by the new FSA. Oops they don't perform aqs well as expected - who gets sued ? Me Tom IFA as usual.
Unsuitable or offensive? Report this comment
Martin Cox | 14 Jul 2010 4:13 pm
It is simple really - Buy a savings stamp at the PO stick it on your card with NI number and claim redemption and interest any time.
P.S they had these in 1945!
Unsuitable or offensive? Report this comment
compliance man | 14 Jul 2010 4:34 pm
Well I thought that the vast majority of mortgages were simple products but the FSA want to stop people being able to make their own choices and risks and insist that the lender has to do so much work to check affordability - including allowing a cushion for rising interest rates etc - that the cost of the product will be higher and some people will be unable to get a mortgage that they would probably not default on if it were granted.
I know I wouldn't have been able to buy my house when I did using the new assumptions suggested and I never missed a payment and have paid it all off.
Following this basis the FSA will actually stop people buying these simple savings products because there is a real danger they may not be able to afford the savings if they have a life changing event!
Unsuitable or offensive? Report this comment
Andy Newman | 14 Jul 2010 5:00 pm
Now don't be silly Tom, there will of course be a price cap at something like 0.3% and we will distribute it through the checkout at Tesco's.
We could set up a delivery authority of failed ex bankers to run it and spend a fortune of salaries and a logo.
Now, would you like cashback with your Hobnob sir?
Unsuitable or offensive? Report this comment
Consultationitis | 14 Jul 2010 5:05 pm
We were very busy with a 'consultation' about the RDR while the banks were sinking in their own mire. The RDR came out exactly as planned at outset.
The best definition of "Consultation" I could find on Google was "When completing a reference researchers will seek out and meet with people with relevant knowledge and experience in the area. These meetings are called consultations."
Does Mr Hoban intend to comply with this very accurate, to my mind, definition of "Consultation"? Or has he already made his mind up? If so he should not waste our time.
Unsuitable or offensive? Report this comment
Robert Donaldson | 14 Jul 2010 5:53 pm
How simple is an ordinary deposit account or a cash ISA.
When will people learn that for the vast bulk of people saving is not a priority. It is jam today that is important.
Whilst I deplore the antics of some sales teams of the past, at least people were better insured, better saved and better pensioned.
Live in the real world simple products is not the problem, it is educating people that the welfare state will not be their to protect them forever they need to accept responsibility for their own finances.
Unsuitable or offensive? Report this comment