Banking: Savings Accounts

Lord Newby Excerpts

Monday 23rd May 2011 Lords Chamber

[Lord Sassoon]

My Lords, I am grateful to my noble friend for raising this important area of savings. We should remind ourselves that a total of 23 million people hold ISA accounts, and of those 15.5 million hold cash ISAs, so this very important part of the savings market is held by some 40 per cent of households. My noble friend’s Question prompted me to speak to the British Bankers’ Association today and I can confirm that the association is working on its own recommendations following on from those made last year by the Office of Fair Trading after it had looked at this area. For example, from early 2012, additional information about the interest rates being offered will be shown on all statements. Further, in line with the recommendation made by the OFT, the association’s members are working to significantly shorten or halve the time it takes to switch accounts. But the structure of interest rates being offered, which is increasingly transparent on the websites that are now available, is a matter of commercial competition. I would recommend all savers to take advantage of the tools that are out there in order to shop around.

[Lord Newby]

My Lords, in view of the success of the tax-free index-linked bond issue recently offered by National Savings & Investments, what plans do the Government have to keep this very popular product on the market in the future?

[Lord Sassoon]

I am grateful to my noble friend for drawing attention to the fact that the 48th series of fixed-interest and index-linked savings certificates was launched on 12 May. It is our intention to keep this series on sale for a sustained period. Of course, there is only a certain amount of availability within the targets we set for NS&I, but I am pleased that we are able to fill a gap in the savings market by putting particularly index-linked savings certificates on sale again. They are proving to be popular, but I am advised that there is still a supply of them available. Noble Lords who would like to invest in them do not need to rush out of the Chamber at this moment.