A Government steering group has released eight recommendations for offering simple financial products for consumers.
The group, chaired by former Lloyds Banking Group chief risk officer Carol Sergeant, is looking into how financial products such as saving accounts could be simplified.
Ms Sergeant said: "We have known for a long time that being able to manage your finances effectively leads to increased well-being and a better quality of life, at every given level of income. I hope that the simple financial products initiative will make it easier for people to understand and compare the key financial products they need and make good choices with confidence."
The eight recommendations are:
• All simple financial products will comply with an agreed set of high-level principles, which cover product features, language, terms and conditions, pricing transparency, purchasing process, and regular information and product updates.
• The language used in simple financial products will be straightforward and consistent between products, and all key terms and conditions will be the same for each product, making them easy for people to understand and compare.
• The first set of simple financial products developed will be:
◦ an easy access savings account;
◦ a 30-day notice savings account;
◦ a regular savings account; and
◦ a fixed term life insurance product.
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• A whole-of-life insurance product should be the next product added to the suite. The Association of British Insurers (ABI) will lead further work on a simple income replacement product and report back in six months.
• A simple financial products badge will be created and awarded to qualifying products via a robust accreditation process. Simple financial products will carry this badge, the brand of the provider, and the British Standards Institution (BSI) 'Kitemark' to clearly identify which products meet the simple financial products standards.
• The BSI will be responsible for setting product standards, licensing the use of the simple financial products brand and monitoring adherence to the product standards and specifications.
• Credit unions will be invited to develop credit union specific simple financial products.
Responding to the recommendations, Anthony Browne, chief executive of the British Bankers' Association, said: "The BBA and its members welcome today’s report as the common goal for the Government and the financial services industry is to enable all consumers, whatever their level of financial awareness, to plan for their financial futures and make financial decisions with confidence. The development of a suite of simple financial products, which are easy to understand and compare, should help customers to save for a rainy day and to protect themselves against the unexpected."

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