More Complex Proposals To "Simplify" Saving

The Centre for Policy Studies is reported as saying today "long-term savings are overly complex, with multiple tax regimes that deters people from saving."

I agree.

As the report notes:

"The pension and savings industry has suffered a near fatal erosion of trust, fuelled by mis-selling scandals, excessive costs and a long period of poor investment returns. This has catalysed a regulatory backlash."

Then it goes way off the rails:

"The industry must now embrace the Retail Distribution Review and work collaboratively with the FSA to help it rebuild that trust. Only once this has been achieved could the industry credibly commence negotiations with the FSA to reduce the regulatory burden."

Why not start with the Treasury? The FSA is as much a victim of all the complexity as anyone else - check out the virtual swamp that is the FSA's "Money Made Clear" web site.

While the proposals to simplify financial regulation are proposed by reference to the current arbitrary product categories, mystifying jargon, pots and limits, the situation will only become worse.

Let's start with a clean slate that supports all the ways people want to use money.

For those with surplus money, we should aim to deliver diversification without the average person needing to understand more than the concept of not putting "all your eggs in one basket".

Ask yourself: why can't I put suitable financial services in a shopping cart, like I can buy other stuff?