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EDITIONS
NEWS Tuesday, 9 March, 1999, 19:25 GMT
Higher returns for pensioners
financial consultation
Savers and investors will be able to compare all products offered
A new "pensioners savings bond" will be offered to retired people to help alleviate the effects of falling interest rates, under measures announced in the 1999 Budget.

Chancellor Gordon Brown, said: "To help the elderly get more out of their savings I have asked National Savings to issue a new pensioners bond. With the shorter term deposits that pensioners want, this new bond will offer the returns that pensioners need."

After five interest rate cuts in the last six months, savers are experiencing the lowest interest rates in a generation.

Details have not yet been announced on what interest rates will be offered on the new bonds.

Investment league tables

Meanwhile, consumers are to be provided with figures enabling them compare pension, insurance and savings products on offer in the UK.

The Financial Services Authority (FSA) will be asked to publish regular league tables of all investment offerings, Mr Brown announced.

In a bid to prevent a repeat of the 11bn pension mis-selling scandal, the measures are designed to give consumers better information for more informed financial decisions.

To match these measures for home loan borrowers, banks will forced to publish reliable comparative information on their mortgages for borrowers.

Mr Brown said the moves would create one of the most competitive financial services markets in the industrialised world. However, no details are available as yet as to what information will be required for the FSA's comparison tables.

The government's 'cost, access and terms' standards, or 'Cat marks', to apply to the new individual savings account (Isa) may provide a clue.

Pensions company Scottish Equitable welcomed the league table plan, but warned of the pitfalls of not comparing like with like.

Director of pensions development Stewart Ritchie said: "Cost should not be the only consideration behind investing in a savings or pensions vehicle - it is dangerous to say that cheapest is best."

A spokesman for the FSA said: "We shall consult with the industry and consumer groups and how best to prepare product comparisons to ensure that they are robust and manageable."

No change on savings tax

Despite a raft of changes in business and income taxes and rises to minimum pension levels, tax rates on savings are to remain unchanged in 1999.

The government has already outlined its direction for savings, with the consolidation of tax-free savings products under the individual savings account (Isa), to replace Peps and Tessas on 6 April this year.

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05 Apr 99 | Your Money
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