Outcomes and key points from
Individuals Stakeholder Forum Saving Gateway workshop – 12 June 2008
Mark Hayward from the HMRC Saving Gateway project team and Miranda Worthington
from HM Treasury attended the Individuals Stakeholder Forum workshop on
the Saving Gateway and the role of intermediaries in providing support and
advice to individuals opening accounts.
The following points were made in discussion:
- It was observed that intermediaries might be prevented from giving
advice to potential account openers because of the restrictions imposed
by the FSA regulatory framework on provision of financial advice. There
are legal parameters within which advice agencies must operate so while
agencies could give information on the scheme and support with account
opening itself, they could not provide financial advice.
- It would therefore be critical for intermediaries to understand clearly
the dividing line between providing information/support and provision
of financial advice. It was important for HMRC to recognise that providing
support/information and providing advice were two separate functions.
- Because of the customer groups some intermediaries deal with it was
felt that, while they might agree with the underlying aims of the Saving
Gateway in encouraging those on lower incomes to save, they might have
a duty to advise their clients to use their money first for other purposes
(repayment of debts, meeting tax obligations, and so on).
- The value of HMT/HMRC working with intermediaries who are not intimidating
to the target group (for example credit unions, CABx and Housing Associations)
was emphasised.
- Interest was expressed in promoting the scheme but it was emphasised
that this would be about providing information only - in many cases advisors
(unless properly regulated financial advisors) would not be able to advise
clients on whether the Saving Gateway was better than other comparable
savings products.
- It was felt that, because no commission would be paid on take up of
accounts it would be difficult to encourage Independent Financial Advisors
to engage.
- There was some discussion of the FSA financial capability work. It
was suggested that HMRC should ensure their work on the design of the
accounts is coordinated with the work the FSA is doing on financial capability.
HMRC should also seek to learn from the lessons provided by the experience
of the Money Advice Trust.
- It was suggested that the letter of invitation sent to an eligible individuals
should list organisations that offer support to those wishing to open
accounts.
- HMT/HMRC should ensure they tie up with the DWP 'let’s talk money'
scheme.
- It was suggested that potential savers be reassured that the scheme
be designed to reflect that there are points during the year when people
on low incomes tend to be under the greatest financial pressure (eg Christmas,
beginning of the new school year, etc).
- It was suggested that it should not be assumed that all of those eligible
would be UK resident and that information would need to be made available
about the scheme in foreign languages.
- A number of more general comments were made on the scheme, including
the potential complexity of 'passporting' individuals from benefits and
credits and the difficulty of tracking people's eligibility as they may
move in and out of the passported benefits/credits frequently.
- The Money Laundering Regulations requirements on individuals to prove
their identity were felt to be a barrier for people on low incomes to
take up the scheme.
- If any of the members of the Individuals Stakeholder Forum have follow-up
questions about the Saving Gateway or would like to express an interest
in being involved in future consultation on the operational design of
the Saving Gateway, please contact Mark Hayward at HMRC:
Email: Mark Hayward
Telephone: 020 7147 2770
