HISTORIC PRESS RELEASE : Helen Liddell champions savers [May 1998]

The press release issued by HM Treasury on 18 May 1998.

Economic Secretary Helen Liddell today invited financial services firms to help put customers first with a new class of savings which will be simple, clear and fair. She was launching a Treasury consultation paper Making Saving Easy. It suggests voluntary standards for individual savings accounts (ISAs) to give ordinary people a straightforward way of spotting deals worth having.

Stressing the importance of giving the public a fair deal, Mrs Liddell said:

“Today we are opening a debate about how financial firms can help their customers. People want everyday good value, and we want to help them find it without hassle. We want to put the customer first.

“That means working in partnership with the industry to develop a range of no nonsense savings which are simple, clear and fair. Savings like that will be easy for people to understand and so help them avoid making poor choices.”

Making Saving Easy suggests voluntary standards which home in on three features: reasonable Cost, easy Access and decent Terms. These define the CAT standards, picking up the initials to remind people of what they are.

There will be three sets of CAT standards, one for each kind of ISA. That is, one for the cash (or deposit) ISA, one for the insurance ISA and one for the stocks and shares ISA. Once people have decided what kind of saving they want, they can have confidence that savings plans that meet the CAT standards should be a reasonable deal.

The CAT standard is not a kitemark. The Government is not giving certain products a seal of approval, still less a guarantee. What the CAT standards do offer is a simple way of judging whether savings offer decent value.

Mrs Liddell added:

“The great thing about the CAT standards is that they will take away the worry about the small print. Savers whose ISAs meet the CAT standard will not face nasty surprises or awkward catches. They can expect something very old fashioned yet very up to date – decent value.

“Best of all, the CAT standards should mean that there is more competition in the market for people with small amounts to put away. Too often they have to settle for poor value and limited choice. It is time ordinary savers were better looked after”.

There will be no compulsion for every ISA to meet the CAT standards. ISAs that do not may be good value. But savers will generally want to make sure that they are getting something extra from savings which are not CAT standard.

It will be easy to tell whether a savings vehicle meets the CAT standard because its advertising will say whether it does or does not.