TISA held a successful seminar yesterday on the key findings from Our Financial Future.  The final speaker was Charles Roxburgh, Director General of Financial Services at the Treasury.  Charles provided some very valuable insight and I thought it merited sharing with the project because this provides a very strong steer to the work we are doing.  We shall seek to take these comments on board when considering strategic proposals.

Charles covered 3 themes (1) that the Government understood the importance of savings, (2) what the Government’s ideas were and (3) what the industry can do

(1)

• Recognition that savings provide long term investment and this is critical to the economy
• Consumers ned to reduce debt
• They need to rebalance the economy from consumption to savings
• 46% of consumers have less than £1,500
• Government focus is to pay off debt by 2030 but unless action is taken to address the pensions issues, this will start rising again from 2030
• The UK has a low historic savings rate and the change in how this is measured does not address the issues of people not saving enough

(2)

• The Chancellor has promised free financial guidance to all consumers at the point of retirement – the Treasury is currently working on forecasting the potential demand
• Acknowledges that it ha been tough for cash savers with such low interest rates and has introduced new pensioner bonds higher premium bond limits to compensate
• Launch of the NISA with increased limits

(3)

• Consumer interest must be at the heart of the industry’s thinking when developing solutions
• Want to see more innovation that should be consumer driven
• Make proposals that capture the attention of politicians and governmental bodies
• Simplify financial products
• Greater transparency – especially fees which should be fair
• Make greater use of behavioural economics
• Focus on nudging consumers rather than advocating compulsion
• Now is a good time for the industry to have new thinking
• Treasury currently focused on delivering latest reforms so not looking to push through new ideas before the new parliament
• Are prepared to listen now to new ideas
• Build on ideas that the Government has demonstrated they like
• Develop solutions that are politically viable and attractive to Government
• Open to the industry proposing ideas that provide new / increased savings using the existing levels of Government spend on tax relief
• Expect some tactical re-positioning of existing products post budget announcements but in longer term focus must be on how to make the pot bigger