Saving Gateway Accounts Bill
4:37 pm
Adrian Coles: Certainly some building societies will offer this product, but not all of them. Those who are inclined not to offer the product—of course, we do not know until we have seen the full set of regulations—tend to say that the market will be small and the costs will be high. We know that the maximum estimated size of the market is £260 million. That is about 0.6 per cent. of the flow of new deposits in 2007, yet some aspects—the requirement to give statements, the transfer of accounts between different types of institution during the two-year period, the requirement to provide information to Her Majesty’s Revenue and Customs and so on—could lead to significant costs on fairly low-balance products, so for many societies, the jury is out.
I am certain that some societies are sympathetic to the product and will want to offer it, but others, in the current environment of low profitability, low margins, difficulties in the mortgage market and very low interest rates, may decide to stay out of the market.