Review of financial fairness and extending financial guidance to younger savers

by Dr. Ros Altmann

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For so many years I have been an independent consumer champion, working on making finance work better for customers, exposing injustice and helping ordinary savers understand finance. I have focused on policy, rather than politics, trying to make finance work well for the many, not just the few. I have worked with all the major political parties and have maintained my neutrality but I want to let you know that I have now decided that the best way to achieve what customers need is to become more directly involved.

The following is from the Prime Minister’s official release:

Ros Altmann to be a Minister in the next Conservative government – leading a review of financial consumer protection and financial education

Today the Prime Minister is announcing that consumer champion and pensions expert Dr. Ros Altmann is to be nominated as a Conservative peer and will be appointed as a Minister with responsibility for financial consumer protection and financial education in a Conservative government.

Improving dignity and security in retirement for working people lies at the heart of the Conservatives’ long-term economic plan.

Following the biggest pension reforms in a generation, one of her first roles will be to lead a review of financial fairness for consumers.

The Prime Minister said:

“What we’re doing is taking the country’s leading expert on pensions, on savings, on financial education, Ros Altmann, and saying that if we’re re-elected, she’ll be at the heart of government, making sure we complete this great revolution where we’re giving people much more power to save, to access their pension, to pass their pension on to their children, because we want to create a real savings culture in our country for everybody. Not for the rich at the top, but for everybody who saves or has a pension.”

So, I will have the chance to work from inside Government, in a Ministerial role that will straddle both the Treasury and the DWP, on consumer protection, financial fairness and financial education. I believe that working in both Departments is important in order to have joined-up policy.

Following on from the pensions and savings reforms introduced in the past year, it is so important to ensure that customers are treated fairly by the large financial companies. I also believe it is vital to roll out financial education to everyone, not just those nearing the end of their working life.

I will carry out a major review of financial fairness for consumers, including:

• charge caps for pension products to protect savers from excessive fees;
• improved rights for older consumers especially in the mortgage market;
• promoting competition and innovation for all savers;
• developing the Pension Wise service to offer financial education and guidance to working people at every stage of their lives – not just nearer retirement

I do passionately believe the new pension reforms – and trusting people with their own money – are an essential step to helping everyone make the most of their hard-earned savings. For too many years, consumer rights have played second fiddle to the interests of large financial firms, but the new pension freedoms show that the Conservatives have put the interests of British savers first and that is a real game-changer.

In the 2014 Budget, they stood up to the large companies who had too often taken advantage of their customers and have paved the way for a new environment for long-term savings, which does not force people into buying products that may not be suitable for their needs. They have created the opportunity for working families to save more if and when they can, knowing they will be allowed to use the money as best fits their circumstances.

There are some who say only the financial industry, or Government, know best what people should do with their money and that most people can’t make sensible decisions for themselves. Well, I disagree. Yes, some may be reckless but I truly believe most British savers will be responsible and can be trusted to make the right choices. They will need protection, they will need guidance and many will also need advice, but that is where I hope I can make a difference.

It will be my job to review this and ensure customers get a fair deal – I am delighted to be offered the chance to do so.

I want to see long-term savings work better for ordinary families who put their hard-earned savings aside for their future, which is so important to restoring the strong British savings culture. Those with the largest pension savings already had the freedoms and flexibility that are now open to everyone, but of course we must ensure financial services firms move with the times. This will mean a new mindset from providers and potentially further Government action to protect savers better.

Of course it won’t be easy, but I’m determined to make a difference. I will remain a champion for consumers, but also want to work with the industry to adapt to the new environment. I can do this far more effectively from within Government than as an independent outsider.

I will also continue to champion the need for fairness and inclusiveness for women and for customers of all ages – which is where I believe financial education and guidance can be particularly powerful.

The savings and pension reforms are only a start, the next steps are yet to come. Making financial services work better for the customers they are trying to serve will ultimately also benefit the industry itself. We have strong, vibrant financial firms who are world leaders, but their long-term success will require a new approach. Modernising and adapting are vital. Some are already recognising this and I look forward to engaging constructively with them. Too many, however, are still relying on past captive customers being locked into expensive, inflexible products. Such practices need to be abandoned, in favour of more customer-friendly approaches, that will bring far more money into long-term savings in future.

I hope to help this happen.

ENDS