First product to pass simplicity test has been launched
A revolution in simple savings and insurance products has begun. A year after a government review demanded that banks scrapped confusing gimmicks and tricks, the first new product to pass a stringent simplicity test is being launched.
Barclays is first out of the blocks with a BSI-approved life insurance policy, but the author of the review said she expects rival high street institutions to introduce their own simple products soon.
The Sergeant Review called for the development of a range of simple savings accounts and life cover. Products must be "clear, straightforward and standardised" to be awarded a BSI Kitemark which, it is hoped, will send out a reassuring message to consumers.
"All high street financial product providers should offer their customers a range of simple products," Carol Sergeant said.
"People don't like complicated products that are hard to understand – they don't trust them. The products should be easy to understand, easy to buy, easy to compare and easy to manage.
"The BSI certification process will ensure that they do what they say on the tin and the BSI Kitemark will be available to any financial services company that meets the standards."
The Treasury set up the review in 2012 because of concerns that many people were doing little, if anything, to protect themselves financially.
"The statistics are overwhelming about how many people are underprovided when it comes to rainy day savings and protection to get them through the ups and downs of life," said Ms Sergeant.
"Isn't it terrible, for instance, that people end up going to payday lenders?
"If they had some rainy day savings they wouldn't need to do that."
She pointed out that one of the key issues is that people are bewildered by the range of savings products and different prices on offer.
That view is backed up by damning research published this month by the consumer group Which? Its report reveals systemic failings and poor practices in the savings market that distort competition.