Barclays's new life insurance heralds a revolution on the high street
The new product marks a shift towards 'clear, straightforward and standardised' banking products, says Simon Read
A revolution in simple savings and insurance products begins today. 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 told The Independent.
"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 today by the consumer group Which? Its report reveals systemic failings and poor practices in the savings market that distort competition and make it difficult for people to know whether they are getting a good return on their savings.
It found a wide range of problems including confusing account names; "zombie" accounts (ones that initially paid good interest but now pay almost nothing); rollover and auto-renewal practices; poor customer notification; and difficulties switching to another provider.
Which? is calling for the Financial Conduct Authority to use its competition powers to scrap some of these practices and revolutionise the savings market. BSI-approved accounts will achieve that aim. For instance, misleading teaser rates are banned from the range of simple savings products.
"Savings accounts that are easy to understand and easy to manage would be much more popular so financial institutions need to start to think differently," Ms Sergeant said.
"They should be asking themselves why millions of people are not buying these essential products and think about what they can do to make them more accessible and more trusted."
Launching Barclays' new BSI-approved, fixed-term life insurance policy, Catherine McGrath of Barclays Personal Banking said: "We see this as an important step forward for the industry. We are determined to drive simplicity across our product range."
Others are rumoured to be close to launching similar simplified products. "We needed a first mover and I didn't mind who it was," said Ms Sergeant. "Now the challenge is there for others to follow."
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Sales of the tablet are set to fall again, say analysts
Follow the latest updates from the Monday night Premier League fixture
Met Police confirm there was a 'minor disturbance' and no-one was arrested
George Lucas criticises the major Hollywood film studios
Does Chris Grayling realise what a vague concept he is dealing with?
Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets
Concerns raised phenomenon is threatening resort's image as a family destination
I Am Bread could actually be a challenging and nuanced title
Peter Biaksangzuala died from his injuries in hospital on Sunday
Mark Dampier: Woodford’s young companies could be the stars of the future
Use the new pension freedoms to boost your retirement income
Money Insider: Help to Buy must be boosted by building
Weekly Money: Round-up of the personal finance stories you may have missed 13-17 October
How to start your own internet business
- 1 Indian footballer Peter Biaksangzuala dies after injuring spine doing somersault celebration
- 2 Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
- 3 Drink alcohol and eat meat to improve male fertility - but cut down on coffee, studies suggest
- 4 Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
- 5 Lynda Bellingham dead: Loose Women presenter dies after battle with colon cancer
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Sorry Judy Finnigan – Ched Evans is no less sickening than an alleyway rapist
Residents should throw a street party and mix with immigrant neighbours, councils told
Workers 'could be forced to pay £5 a week' to get benefits
Russell Brand threatened with arrest after filming outside Fox News headquarters
Amal Alamuddin calls for the return of the Elgin Marbles from Britain: 'Injustice has persisted for too long'
iJobs Money & Business
£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...
£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....
£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...
£27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...
Day In a Page
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village