UK - The government must "learn the lessons of stakeholder" and stop meddling in the design of pensions and savings products, the Association of British Insurers warns.
In its response to the Treasury’s consultation paper on Sandler’s proposals for simple financial products, the ABI said the 1% price cap increased risk for providers and restricted the number of lower income people saving in these products.
ABI director general Mary Francis said: “Competition, not prescription, is the best way of meeting customers’ needs.
“But if we must have price controls, there should be sufficient headroom to pay for guidance and advice. Otherwise, as we’ve seen from stakeholder, people in the target market won’t save.”
The ABI says the government should consider the “international standard model” of setting a charge on each contribution in addition to a 1% annual charge on the fund.
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