In its white paper on banking reform released today, the Government said it will be investigating whether to introduce such a system in order to improve consumer access to basic financial products.
The Government says any such scheme is likely to be compulsory as there would be a strong incentive on providers of complex or expensive products not to provide a rating under a voluntary system.
The paper mentions that both stakeholder and CAT standards were unpopular with the financial services industry.
The white paper says: “The ideal system would allow freedom over product design, while guiding those people who would be best served by basic, cheap and accessible products in the right direction.
“Wherever people do choose other, more complex options, the system should make sure that they do so knowing about cheaper and simpler alternatives.”
The Government will be undertaking further analysis on this with the FSA and will issue a more detailed consultation by the end of the year.