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ABI warns savings gap poses greater economic threat than collapse of UK insurer

Association of British Insurers chairman Archie Kane has warned that the savings gap poses more of a threat to economic and financial stability in the UK than the failure of any individual insurer.

Speaking at the ABI chairman’s dinner last night, Kane said repeated and often unexpected change to the fiscal regime has sapped people’s confidence in savings.

He said: “Would it be too much to hope the upcoming Budget will set out a clear and coherent plan for improving the savings rate in the UK? Any plan needs to be flexible, but the industry, its investors and most importantly our customers need a clear glide path into the future.

“And any plan needs committed and consistent execution from the people at the top.”

Kane said in the past nine years the Department of Work & Pensions has had eight different Secretaries of State.

He says: “This is the department responsible for solving the UK’s long-term welfare and pensions problems.

“How on earth can anyone be expected to make a difference in such a complex department with such complex issues if their average time in office is going to be less than a year?”

In addition to clear and consistent policies, Kane said there needs to be recognition of the value that financial services brings to the economy and the regulatory response to the economic crisis needs to recognise that insurers are not banks.

He said: “High risk activities need to be tackled, but the regulatory response needs to recognise they have nothing to do with insurance.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. … and of course the sales prevention dept at the FSA together with the RDR lobbying from the ABI and all their self interest members have done their bit to stop investment planning!

  2. Anon where is the vested interst of the ABi in promoting RDR and what has this got to do with the savings gap? Most people who need to do something about savings are never ever going to be the sort of customers IFA’s want. (You only want wealthy clients if honest)

    The issue here is squarely with government. The historic problem has been easy credit and no perceived need to save…until now.

    What we need are some incentives and framework other than ISA’s which are essentially middle class and cash based to do acheive this

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