SANDLER REPORT: SIMPLE SAVER PRODUCTS LACK CONSUMER PROTECTION

3.19.53pm BST (GMT +0100) Tue 15th Jul 2003

The Treasury has released its response to its recent consultation on a suite of simple savings products for those on lower incomes.

Expressing his disappointment on the lack of proposals for firm regulatory supervision, Vincent Cable MP, Liberal Democrat Shadow DTI Secretary, said: "There are serious concerns about how this lighter touch approach would affect low-income investors. The proposal for 'guided self-help' as opposed to face to face advice is the least desirable solution."

"Some of these simple products could still be high risk for certain consumers. Who will guide consumers on whether an investment product would be better than debt reduction, or using money elsewhere?"

"If these products are taken out of the FSA framework, consumers won't enjoy even the limited consumer protection provided by the financial ombudsman so miss-selling remains a risk."

"The Government has consistently failed in its attempts to help people bridge the savings gap. If this suite of products is to have any impact, a network must be created using trusted organisations providing face to face high quality, independent financial advice."

"A rethink is required on charge capping for these products. Providers will only be prepared to sell these products to lower income consumers if it is economic for them to do so."

ENDS

The Treasury announcement is located at: http://www.hm-treasury.gov.uk/newsroom_and_speeches/press/2003/press_86_03.cfm>