With the household savings ratio at 2.1% in Q1, the lowest in 47 years, AIFA is concerned the FSA's Retail Distribution Review could potentially reduce the figure further.
The Office of National Statistics results show the ratio has slipped from 3.9% in the previous quarter and 6.3% in the same period in 2006, despite an interest rate rise of just 1% since January 2006.
AIFA director general Chris Cummings says the low figure is a key challenge for Government.
“Currently, the intermediary industry not only promotes savings, but facilitates savings with independent advice, which has the potential to exceptionally improve individual wealth,” he says.
“An important question for the FSA is: will their Retail Distribution Review help or hinder the savings ratio?”
Cummings says unless the FSA puts the consumer interest at heart, the ratio could slip further.
“It is essential that the Retail Distribution Review does not deter people from seeking independent advice and it does not price consumers out of the financial advice market,” he says.
“Those that want and need independent financial advice should always have access to it.”
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