A group of representatives from industry bodies including the Association of British Insurers, the Money Advice Service and Which? have put forward recommendations to launch a range of simple financial products with no additional features.
In October, the Treasury created a steering group to develop a range of simple products, headed by former FSA director and Lloyds Banking Group chief risk officer Carol Sergeant.
In its interim report, published last week, the group proposed a template for an easy access savings account, a 30-day notice account and simple life cover. It is also consulting on developing a simple income replacement product for those who have lost their income due to sickness.
The simple savings products would require a minimum deposit of £1, with no charges for the day-to-day running of the accounts. There would also be no introductory bonuses or tiered rates.
Simple life cover would be provided on the concept of “you die, we pay”, without additional features such as joint life, indexation or waiver of premium.
The group plans to set up an accreditation body to ensure the products meet core standards and an accompanying kite mark badge so they are clearly identifiable to consumers.
The full set of initial recommendations set out in the report is now open for consultation, ahead of publication of the final report in February.
The group says its proposals have been designed to be offered on a non-advised basis. The report has identified a target market of 29.4m adults for simple savings products and 19.8m adults for simple life cover.
Treasury financial secretary Mark Hoban says: “Simple financial products offer a unique opportunity to demonstrate that products can be easy to understand and meet customers’ needs.”
Equity Partners UK managing director Kevin Tooze says: “Simple products are designed to guide people but sometimes they end up having the reverse effect and being quite dangerous. It seems like another move to bypass IFAs.”