Savings industry "complex and opaque"

An influential committee of MPs has accused the UK savings industry of having "failed to adapt to the modern world".

14:38 28 July 2004

An influential group of MPs has accused the UK savings industry of having "failed to adapt to the modern world".

A report by the House of Commons Treasury select committee condemned the savings industry as "complex and opaque" and limping from "crisis to crisis".

The committee concluded that the 1,900 billion sector had been deceiving and confusing consumers to the point where "most people now trust their local supermarket more than many of our largest life insurers".

The report, undertaken as a result of recent financial market scandals, recommends standardised easy-to-understand summaries on all savings products and urgent reform of the independent financial adviser (IFA) system.

The MPs concluded: "The sheer scale, diversity and nature of the problems encountered by customers show that the industry needs a thorough re-think of the nature of the products it sells, how it sells them and the 'after-sales' service it provides.

"The industry currently fails to engage in serious dialogue on a regular basis with consumer bodies and other interested parties on issues such as pension reform, access for the less affluent or, indeed, general consumer confidence."