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."
- 1 Woman falls to her death as she celebrates marriage proposal at the edge of Ibiza cliff
- 2 Venezuela Expo Tattoo 2015: Extreme body art from 'Vampire Woman' to 109mm earlobes
- 3 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 4 Dad attempts revenge on teenage daughter, plan backfires spectacularly
- 5 Ball pool for adults opens in London
9 reasons Greece's experiment with the radical left is doomed to failure
Have we reached 'peak food'? Shortages loom as global production rates slow
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
King Abdullah dead: We can't afford not to hold Saudi Arabia's royals to account
iJobs Money & Business
£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...
£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
Day In a Page
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
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