HM TREASURY News
Release (37/07) issued by The Government News Network on 28 March 2007
Brian Pomeroy, the
Chairman of the Financial Inclusion Taskforce, has today published
his review into Christmas hamper savings schemes, which was
commissioned following the collapse of Farepak. The review argues
that these schemes are valued by many, particularly low-income,
households, but that it is essential that money paid in advance to
hamper scheme companies is properly protected. However, the review
also argues that it is important that there is genuine consumer
choice and encourages mainstream financial services providers and
major retailers to compete in this market and recommends that more
is done to inform and educate consumers about the advantages and
disadvantages of the range of Christmas savings options available
to families.
Brian Pomeroy said:
"This is a market which has operated for many years and
provides as many as 700,000 families with a useful way of saving.
However, it is vital that more is done to protect its customers
and ensure genuine choice for those who want to save for Christmas."
The review recommends that:
* The DTI should urgently ensure that secure arrangements are put
in place by hamper scheme companies in order that customers'
prepayments are effectively protected.
* The Office of Fair Trading should consider whether there are
any competition issues that need to be addressed in the hamper
scheme market.
* Retailers should consider increasing the attractiveness of
their Christmas savings schemes by giving customers greater
protection in the event of the loss or theft of cards.
* The Government should encourage providers, particularly the
Post Office and the credit unions, to compete in this market and
to develop innovative ways of attracting hard-to-reach customers.
* Informal savings schemes should be given greater emphasis
within the scope of the Government's financial capability and
inclusion work, including the Thoresen review of generic financial
advice, the DWP's "now let's talk money"
initiative and the FSA's financial capability work.
* In view of the uncertainty that has been caused over Christmas
savings schemes, and the risk that this may prevent people who
would otherwise have saved for Christmas from doing so, the
Government should consider mounting a specific campaign to make
consumers aware of their options.
* The Government and its relevant agencies should ensure they
become aware of, and well informed about, all methods of saving,
whatever legal form they take, and that they consider them when
thinking about risks and consumer protection. The Government
should also take steps to improve the data available on the hamper
scheme market and other forms of informal saving, possibly through
the Family Resources Survey or the new Wealth and Assets Survey.
NOTES TO EDITORS
1. In November 2006, the Economic Secretary asked Brian Pomeroy
to investigate the Christmas savings market to look at the reasons
why people opt to use hamper schemes and similar vehicles instead
of mainstream financial services products and, in the light of
this, to consider how the savings needs of this group of consumers
might be better met.
2. Brian Pomeroy is Chairman of the Financial Inclusion
Taskforce. He was formerly Senior Partner of Deloitte Consulting
and now holds a number of public, private and voluntary sector
appointments. He is Chairman of the Payments Council and a member
of the National Lottery Commission (having been its Chair in
1999/2000 and 2002/3) and of the Audit Commission. He is a trustee
of Money Advice Trust, which works to provide advice for people in
debt, and a board member of the Social Market Foundation. Past
appointments include serving as Chair of Centrepoint and of
Homeless Link, the umbrella body representing the homelessness
sector. He was a member of the government's Disability Rights
Task Force, and a non-executive director of the Pensions
Protections Investments Accreditation Board.
3. Copies of the report are available at http://www.hm-treasury.gov.uk/pomeroy.
4. Non-media enquiries should be addressed to the Treasury
Correspondence and Enquiry Unit on 020 7270 4558 or by e-mail to public.enquiries@hm-treasury.gov.uk
5. This press release and other Treasury publications and
information are available on the Treasury website at http://www.hm-treasury.gov.uk.
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