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Treasury calls for simpler products

The Government has suggested that simpler financial products aimed at making customers more responsible with their money should be introduced by banks and consumer agencies.

The Treasury wants banks and other insurance companies to offer standardised schemes but at different costs so that there is more competition between providers and so that it is simpler for customers to understand and compare products.

According to a consultation paper by the Government, particular products such as life insurance and savings accounts are complicated for some customers and therefore they should be the first in line to be developed.

The paper also said that savers could be confused with the number of options in the market, citing an example of there being 2,000 separate savings products offered by 150 different providers.

However, it added that some features of a product are subject to change over time. For example, the expiry of introductory rates could make some people take little interest in comparing them. Therefore a simplified scheme could help keep financial inactivity away.

Financial secretary to the Treasury Mark Hoban said: "The Government is committed to helping consumers take responsibility for their finances.

 

"In order to do this they need to be able to make sense of the huge range of financial products in the market.

"Simple financial products will help them to do that, by providing a safe choice and a common benchmark against which other products can be compared."

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