Clause 7
5:15 pm
Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)
This is a probing new clause. It goes back to the evidence session we had last Tuesday afternoon, when it became clear in the conversations we had with the potential account providers that one of their concerns was the administrative cost of running saving gateway accounts. The income to the providers was quite limited and one of the factors they would need to think about was the cost of the operation of these accounts. When we probed them on this, one of the issues raised by Helen Banks of the British Bankers Association was transferability. She expressed the view that the ability to transfer accounts from provider to provider could add to the costs that they would face. Part of the challenge comes from the way in which saving gateway accounts are structured. If one transferred an account from one bank to another, the transferring bank might normally just need to provide name, address and balance at date of transfer, but for a saving gateway account, given the way in which the matching contribution is calculated, a bit more information is required, and that falls outside the banks’ normal systems. The banks who gave evidence said that the transfer process would probably have to be a manual workaround and, of course, that is always more costly than automated systems. Helen Banks made an argument against transferability, which certainly addressed cost-based issues around the account.