The savings gap poses a greater threat to economic and financial stability in the UK than the failure of any individual insurer, warns the Association of British Insurers.
Speaking at the ABI’s chairman’s dinner last week, chairman Archie Kane said that repeated and often unexpected change to the fiscal regime has sapped people’s confidence in savings.
He said: “Would it be too much to hope the upcoming Budget will set out a clear and coherent plan for improving the savings rate in the UK?
“Any plan needs to be flexible but the industry, its investors and our customers need a clear path into the future.
“Any plan needs committed and consistent execution from the people at the top.”
Kane pointed out that in the past nine years, the Department for Work & Pensions has had eight different Secretaries of State.
He said: “This is the department responsible for solving the UK’s long-term welfare and pensions problems.
“How on earth can anyone be expected to make a difference in such a complex department if their average time in office is less than a year?”
In addition to clear and consistent policies, Kane said there needs to be recognition of the value that financial services brings to the economy and the regulatory response to the economic crisis needs to recognise insurers are not banks.
He said: “High-risk activities need to be tackled but the regulatory response needs to recognise they have nothing to do with insurance.”