The government must take greater account of the supply side of the savings products market if it is ...
The government must take greater account of the supply side of the savings products market if it is to set a price cap on Sandler products that providers find economically feasible, the ABI says.
Sandler products "have the potential" to increase levels of savings, i.e., demand, but they cannot be viewed outside the context of the wider market, the ABI says.
They have to be "attractive not only to consumers but also to companies and their shareholders."
Providers will not make the substantial investments needed to bring new simplified products to market if the price cap is set too low.
The ABI is repeating its view "against [the] backdrop that the government will soon make its decision about how much companies can charge for the new Sandler Stakeholder products."
Its view is also based on readings of the slow pace of recovery in the market for regular savings, according to new ABI figures.
These show that the amount of money tucked away in regular savings jumped by about 20%, or £100m to £579m in the second quarter this year compared to the first, as the stock market improved.
However, levels of regular savings remain well below even their 2002 quarterly equivalents.
The value of all new life and pensions business in the second quarter hit £2.4bn, up "marginally" on the first quarter, but still well down on the £3bn recorded in the second quarter of 2002.
Sales of protection products remains steady, tracking the housing market to a 2% improvement on the same period last year.
Sales of new regular premium pensions are down 19% on the second quarter of 2002, but have recovered 19% from the first quarter this year to the same level of new business before stakeholder was introduced.
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