The final report recommends the introduction of a small suite of simple savings and protection insurance products. HM Treasury has reviewed progress made one year on from the final report.
In July 2010, the Financial Secretary to the Treasury outlined the government’s intention for a new range of simple financial products.
These would help people take responsibility for their finances and to make better choices.
HM Treasury consultation
‘Simple Financial Products: a consultation’ was published on 14 December 2010 and closed 25 March 2011. The consultation set out the government’s initial suggestions for how a new range of simple products could be developed.
The government received 75 responses to the consultation from a wide range of organisations and individuals, including industry, trade bodies, academics and consumer groups. A summary of consultation responses was published in October 2011.
Independent Sergeant Review of simple financial products
The government announced in October 2011 the creation of an independent simple financial products steering group chaired by Carol Sergeant to take the work forward.
The group was tasked with devising a suite of simple financial products to help consumers navigate the financial services market. The aim is to help increase the number of new participants in financial markets by providing straightforward, easy to understand products that are clearly identifiable as meeting “simple product” standards. Responses to the government consultation on simple products suggested that the group should initially focus on simple deposit savings and protection insurance products.
On 8 February 2012, the Financial Secretary to the Treasury and Carol Sergeant set out their vision for the simple products project in a speech at Deloitte. The Steering Group’s terms of reference were also published.
The Steering Group was made up of the Association of British Insurers, the British Bankers’ Association, the Building Societies’ Association, Money Advice Service, Consumer Focus and Which. The Financial Services Authority and HM Treasury hadobserver status on the group. A Secretariat was provided by the Association of British Insurers.
On 2 August 2012 the independent simple financial products steering group published its interim report and consultation. This report sets out the rationale for simple products, analyses the target market, proposes a set of products to be taken forward for development, and suggests a structure for the governance of the ‘simple products’ standard. The summary of responses to the consultation was published on 30 January 2013.
Responses were received from a range of industry, trade body and individual stakeholders and are published above in alphabetical order, except where confidentiality was requested.
A final report was published on Wednesday 13 March 2013. The report recommends the introduction of a set of simple products standards and a small suite of simple savings and protection insurance products accredited by the British Standards Institution (BSI). The report is the result of the collaboration between all the members of the Steering Group, plus a wide variety of financial providers and consumer representatives. Key next steps will be taken forward by trade associations, working with the BSI and many other organisations which have been involved in the initiative. HM Treasury is committed to reviewing the progress on simple financial products in March 2014.
Review of progress
The government reviewed the progress made by industry on the initiative in March 2014, one year on from the publication of the final report. We asked the trade associations for a formal update on the progress they have made in this time. The government welcomes the trade bodies’ progress to date and the commitment to establish an accreditation framework by the end of the year, which is an important milestone in bringing simple products to market. The government remains keen to see simple products on the market as soon as possible.
Industry provided further updates on the initiative in July 2014, in which it confirmed the launch of the first simple product and set out its vision for continuing to deliver against the Sergeant Review recommendations with two accreditation frameworks. The government welcomes the industry’s commitment to ensure that the accreditation frameworks are – and remain – properly aligned, and its determination to work together to ensure that the initiative is firmly focused on securing a good outcome for consumers. The government has asked to be updated on the progress of this work in the autumn.
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