According to the Financial Conduct Authority on Tuesday, the UK’s £700 billion cash savings market does not work well because it lacks new products. The FCA said that about £160 held in easy-access savings accounts earned an interest rate equal or lower than the Bank of England’s base rate of 0.5 per cent in 2013.
This area is dominated by the UK’s Big Four, HSBC, Lloyds, RBS and Barclays. Now, UK lawmakers want them to ease the monopoly and increase the competition between other banks to help offer the best possible deal for consumers.
The mis sold PPI crisis in the UK came with a lack of knowledge from many buyers and pushy salesmen trying to increase their monthly work commission. With more UK banks offering competitive cash savings account rates, the likelihood that another form of PPI could be mis sold in the market is minimal.
Because only the Big Four offer the best rates for savings accounts, it is highly unlikely that anybody could be mis sold PPI given that other bank employees may inform customers that the insurance policy or any form of insurance policy can never be a requirement.
Director of Strategy and Competition at the FCA Christopher Woolard said “We want to see firms making simple information much easier to find. More also needs to be done to reduce the hassle for consumers to switch their savings.”
This is a great way to reduce the number of people mis sold PPI. With better information sources aside from consumer groups, people will stay informed. The country could avoid another trouble similar to payment protection insurance mis selling.