High-street finanical firms have backed the Treasury's move to increase the charge cap and say 1.5 per cent will be enough for efficient providers to generate a profit.
Nationwide executive director Stuart Bernau says: “Nationwide believes that a 1.5 per cent price cap is adequate for efficient providers to sell simple investment products profitably. We support the need for open and transparent financial products.”
HBOS says the 1.5 per cent annual charge is realistic and will increase the level of competition within the savings industry.It introduced a range of what it calls “Sandler-style” products two years ago, with no initial charge, no exit fees and annual charges of 1-1.5 per cent.
A Barclays spokesman says he doubts whether the suite will prove a compelling new proposition for consumers or the industry but it demonstrates Government and FSA commitment to providing solutions for people who are not saving enough.