Prudential chief executive Jonathan Bloomer has submitted plans for an American-style 401(k) savings product to the Treasury select committee in a bid to encourage more people to save for retirement.
Speaking at a committee meeting this week, which was also attended by Aviva chief executive Richard Harvey, Legal & General chief executive David Prosser and Standard Life chief executive Sandy Crombie, Bloomer said he feels that customers need a flexible vehicle which does not lock money away and allows them to feed savings into a pension.
He agreed that it could operate in a similar way to the Investment Management Association's suggestion of a “super” 401(k) concept offering a liquid savings account.
Bloomer also said that he would prefer consumers to pay fees for financial advice but consumers are not willing to pay fees.
L&G chief Prosser reiterated his stance on the 1 per cent charge cap, saying he continues to believe that the cap would be viable if simplified distribution is achieved.
The committee asked the panel to commit to a summary box along similar lines to the idea for credit card companies highlighting charges and giving an indication of risk.
Bloomer says: “We have put forward something that would start people off in an Isa that they could then use as a portal to a pension but would allow them to be flexible.”