MSE News: Government continues simple financial products crusade

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"The Treasury today announced the creation of a steering group tasked with devising a suite of less complicated deals ..."

Read the full story:
Government continues simple financial products crusade

opinions4u

If only we had banks that offered:

Easy access savings accounts.
Current accounts without a fee paying package.
Credit cards that have no fee and only charge interest if you don't clear the balance in full.
Personal loans where you repay a fixed amount each month for a fixed term.
Life assurance that pays out if you die.

Maybe I'm missing something. What are these idiot politicians trying to achieve? What they want already exists!

michaels

Anyone remember the last Govt's FSA instigated financial products 'cat' marks - for mortgages the svr needs to be less than 1% over base - not many of those on the market at the moment

dunstonh

It is like every 10 years they feel they need to reinvent the wheel and introduce products that are doomed for failure.

Simplified products are aimed at smaller savers and those at the bottom end of the market. To market those products the earnings to the companies has to be enough to cover liability and distribution as well as regulation. Typically the previous attempts at simplified products has seen costs rise or the wrong people buying them (i.e. medium to higher net worth people buying the simple products without realising the market has better options for them).

There has been suggestions that simplified products will reduce consumer protection and will not have a "best advice" requirement but will have a "better than doing nothing" level of liability. So, they will be easier to mis-sell and as it will almost certainly be the banks that will pick up the distribution, a product that is easily mis-sold and has lower consumer protection will suit the banks perfectly.

AirlieBird

The Treasury seems to have forgotten there is already a Government "kite mark" for simplified savings products. Has anybody seen a "Stakeholder standard" savings account lately?

Thought not. Why? Because, it is not in banks and building societies commercial interests to provide them.

horsechestnut

opinions4u wrote: »

If only we had banks that offered:

Easy access savings accounts.
Current accounts without a fee paying package.
Credit cards that have no fee and only charge interest if you don't clear the balance in full.
Personal loans where you repay a fixed amount each month for a fixed term.
Life assurance that pays out if you die.

Maybe I'm missing something. What are these idiot politicians trying to achieve? What they want already exists!

Add to the above:-
Loyalty accounts for existing customers that are as good as those for new customers.
Accounts that drop the interest rate after a year, so you have to open another one to get a reasonable rate of interest.

Consumerist

This exercise does seem like the Government wants to appear to be doing something without actually doing anything. This way, they can appease the public without upsetting their precious, money spinning, financial institutions.

I think that whatever comes out at the end of this will be of no use whatsoever to regular users of MSE.

oldvicar

How about a savings bond that pays interest of RPI, plus a bit, preferably tax-free.

Or is that too much to ask?

opinions4u

oldvicar wrote: »

How about a savings bond that pays interest of RPI, plus a bit, preferably tax-free.

Or is that too much to ask?

But that's probably not considered to be "simple".

So they can't manage that.

IronWolf

What's complicated about savings accounts? Just choose the one with the highest interest, and make a note of temporary bonus rates expiry.

The only thing thats "complicated" about accounts is that theres a lot of various options, current, savings, regular saver etc. But how is having options a bad thing?

RobStaffs

This is clearly come on the back of their so called crusade against Energy Price Hikes. The sum product of that crusade was the ground breaking "check you bills" shocker. What are we to expect from the "simplier financial products crusade then"?....god only knows....:mad: What is the next crusade? shop around for cheaper fuel? :rotfl: I bet those on the Isle of Harris cant wait... Our politicians are deviod of imagination .