Call for consumers to test financial products
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A new report has called for a range of low-cost financial products to be developed, including mortgages, which should be tested on consumers to show they are understood.
The reported comes from the Commission of Inquiry into the Future of Civil Society.
The group, which is funded by the Carnegie UK Trust, recommends that there should be a “comprehensibility threshold “ and that no product should remain on the market if more than half of its consumers can be shown to misunderstand fundamental features of how it works.
It believes society should champion the development of low-cost financial products that reflect people’s changing needs.
These could include mortgages that allow for flexible repayment options and new investment vehicles for people who want to hold their savings in forms that benefit the local community and economy.
It also says there is a need for a widely recognised labelling system for financial products, akin to that of Fairtrade, showing how money will be saved and where it will be invested.
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