The financial services industry needs to tap into the Government’s Big Society idea to get political momentum behind boosting saving levels, says Cicero Consulting campaign director Iain Anderson.
At a Money Marketing round table last week as part of our Pave the Way to Save campaign, Anderson said tying up an incentive to save with the Big Society concept of personal provision would be a good starting point to get the ball rolling on raising levels of savings and protection.
Anderson said: “It seems to me the financial sector has yet to join up that big political idea with the savings agenda and I think that is what the industry needs to tap into. The Government would be more likely to listen to an idea connected with the Big Society rather than what is essentially special pleading from the industry to encourage people to invest in their current offers.”
Personal Finance Society president Eddie Grant believes there is merit in the industry focusing efforts beyond the existing market to boost financial awareness.
He said: “We are not really geared towards the mass market at the moment. We spend a lot of time taking about 30 to 40 per cent of the population while the remaining majority is struggling with high levels of debt. That is a mass of people that are going to be disenfranchised if we do not find ways of helping them.”
Anderson suggested the provision of savings and protection products through the workplace could be the missing link to the Big Society concept. He said: “The workplace is a devolved idea of the Big Society as it is an alternative to monolithic, central Government. If the industry could somehow get into that mindset, the idea of boosting savings and protection would get a bit more traction.”
Ideas to boost saving and protection
Instead of asking customers if they want cashback when out shopping consumers are asked if they want to ’save back’ instead. Banks run similar schemes where transactions are rounded up to the nearest pound with the money put aside in a savings account.
Give the CPMA a goal of increasing saving and protection rates
Collective savings schemes
People coming together to save for a common purpose, and benchmarking against each other’s performance. Could be offered through employee benefit schemes or based on grouping an adviser firm’s clients.
An overarching account offering savings, investment, retirement income and protection at different life stages.
Simplifying language on tax incentivisation
For example, replacing the term ’tax relief’ with clear explanations that £x in their pension equals an extra £x back.