The Sergeant Review has recommended a suite of simple savings accounts and insurance policies to make choice and comparison easier and more straightforward for customers.
Simple financial products
The Simple Financial Products initiative is one of three developments designed to ‘put the consumer’s interests at the centre of the financial system’.
It follows the establishment of the Money Advice Service (MAS), to provide free and impartial advice, and the Financial Conduct Authority (FCA), which replaces the Financial Services Authority (FSA).
The Sergeant Review follows Treasury consultations begun in 2010-11 and calls for the establishment of an easy access savings account, a 30-day notice savings account, a regular savings account and a fixed term life insurance product.
Which? welcomes proposals
Responding to the Treasury’s announcement, Which? executive director, Richard Lloyd said: ‘We welcome proposals to give consumers clearer, concise and jargon-free information so they can easily compare savings, insurance and other financial products.
‘Consumers should not have to tackle pages of terms and conditions and they should be told clearly what rates and charges apply, so they can shop around more easily and get a fair deal. We now look to the financial services industry to deliver on these proposals.’
Kitemark scheme for approved accounts
A distinctive feature of the simple products suggested is that they will meet accreditation standards set by the British Standards Institution (BSI), which will award a ‘kitemark’ to qualifying accounts and policies. Suitable products will also carry a special badge and the brand of the provider.
In addition to the savings accounts and insurance product recommended, the Review calls for a whole-of-life insurance product to be developed next. The Association of British Insurers (ABI) will also lead on a simple income replacement product and are expected to report back on this in 6 months time. Credit unions are called upon to develop credit union specific simple financial products.