In January 2015 the FCA published final findings of a cash savings market study. The FCA found that the cash savings market was not working well for many consumers and proposed remedies in four areas: disclosure remedies, sunlight remedy, switching remedies and convenience remedies.
In July 2015 the FCA published a consultation paper on how it intended to take these remedies forward (Consultation Paper 15/24: Cash savings remedies (CP15/24)).
The FCA has now published Policy Statement 15/27: Cash savings remedies: Feedback and Policy Statement to CP15/24 and next steps (PS15/27).
In PS15/27, the FCA sets out its feedback to the responses it received to CP15/24, publishes final rules, highlights where it has adjusted its policy to take into account respondents’ views and sets out its next steps in relation to those remedies for which it has not made final rules in PS15/27.
In PS15/27 the FCA notes that respondents were broadly supportive of the aims of the proposals in CP15/24 and that it has agreed with a number of the comments made and has thus amended some of its proposals. Specifically the FCA has:
- revised the definition of savings account to include accounts that return value in the payment of dividends instead of interest;
- revised the definition of fixed-term savings account to include accounts that permit limited withdrawals within the fixed term with no loss of interest;
- allowed for flexibility and innovation with the format of summary boxes so that they work for mobile and digital channels constrained by space;
- made an amendment so that it is in line with the FCA guidance for the provision of interest rate information to be no more than ‘one-click’ away from the customer’s on-line banking home page; and
- extended the deadline for implementation from 1 July 2016 to 1 December 2016.
With regards to next steps, PS15/27 notes, among other things, measures relating to:
- sunlight remedy. Alongside PS15/27 the FCA has published the first set of data on firms’ lowest interest rates offered on open and closed easy-access cash savings account and easy-access cash ISAs. This information is published on a trial basis for 18 months at six-monthly intervals, during which the FCA will evaluate its approach and assess the impact of publishing this information. If this remedy is found to be effective in changing firm behaviour the FCA will consult on whether the publication of this data should be undertaken on a more permanent basis;
- auto-renewal of fixed term accounts. The FCA has sought information from firms to better understand the scale of auto-renewal and the potential costs of, for example, requiring firms to ensure a customer ‘opts in’ to auto-renewal at the point-of-sale. A further update on this proposal will follow in a consultation paper in early 2016; and
- speeding-up cash ISA switching. In CP15/24 the FCA announced that it was working with industry to deliver seven working-day switching for the vast majority of cash ISA transfers from January 2017. In PS15/27 the FCA notes that in Q1 2016, the industry will be looking to understand the impediments to faster ISA transfers and the FCA aims to announce a target in Q2 2016;
View PS15/27: Cash savings remedies: Feedback and Policy Statement to CP15/24 and next steps, 8 December 2015