HC Deb 06 November 2002 vol 392 c296W
Ms Walley

To ask the Chancellor of the Exchequer what assessment he has made of the contribution tax free financial products make to the quality of life for the less affluent; and if he will make a statement. [79398]

Ruth Kelly

The Government recognise the importance of savings in providing people with security if things go wrong, independence throughout their lives and comfort in old age. The Government's strategy is to create the right environment for saving, create the right incentives for people to save and ensure that individuals have the information and financial literacy they need to make the right saving choices.

The Government have already introduced successful products such as Individual Savings Accounts (designed to encourage saving among individuals, particularly those with little or no savings) and Stakeholder pensions (which have extended the benefits of pension saving to previously excluded groups). In addition, pilots for the Saving Gateway were launched in August 2002 and further proposals are being developed for the Child Trust Fund. Statements on the progress of the Government's saving policies will be provided in the Pre Budget Report.

Ms Walley

To ask the Chancellor of the Exchequer what assessment he has made of the likelihood of less affluent consumers buying financial products without face to face advice. [79397]

Ruth Kelly

Many financial products (for example insurance, and cash savings) are widely bought without face-to-face advice.

Generally, more sophisticated consumers are more likely to buy investments without face-to-face advice.

But, while sales of retail investments without face-to-face advice have grown, the bulk of sales generally continue to be through advisers who will have met their client. However, as the Sandler Review of "Medium and Long Term Retail Savings in the UK" found, distributors have strong incentives to focus on higher income consumers. The Sandler Review therefore recommended building on existing product standards through the introduction of "stakeholder" products that could significantly help less affluent consumers by providing them with simple, good value, and risk-controlled products that could be sold face to face but without the time and cost associated with regulated advice.