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Change of heart on price cap

Sandler has recommended keeping the 1 per cent price cap on his new range of regulated savings products against his own wishes that market forces determine charges.
His report acknowledged the price cap was &#39controversial&#39 but is impossible to renege now that Catmarked Isas and stakeholder pensions are on the market.
It says &#39a 1 per cent ceiling would be a suitable starting point&#39 for the new range of regulated products. But Sandler does want this to be reviewed at regular intervals.
Speaking at the launch of his report, Sandler said he did not want to have to impose the cap, believing it better for the market to drive down charges.
He believes the 1 per cent cap will be easier for the industry to bear if the overbearing regulated sales process is removed in favour of regulated products.
Sandler says: “In an ideal world I would not impose a price cap. An ordinary market would drive down costs of its own accord. A price cap is a necessary part of a regulated product and makes it able to be sold. The level of capping is open to debate.”

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