Standard seeks savings deal

NIC CICUTTI

Standard Life, the UK's largest mutual life company, is considering launching a short-term savings account to help stem part of its annual pounds 300m drain when policyholders' funds mature.

The link-up would be through Bank of Scotland, with which Standard Life also hopes to develop a personal loans service for its clients.

The Scottish insurer's move comes as Prudential, one of its biggest rivals, announced plans to launch a telephone banking service offering building society-type savings accounts and mortgages.

Other leading insurers are believed to be considering link-ups with existing banks or building societies. Under this scheme the insurer gives its name to an account and markets it but it continues to be administered by the other institution.

Both the Pru and Standard Life are hoping to keep their hands on some of the funds they are forced to pay out annually. Last year the life insurance industry paid out more than pounds 13bn on maturing life policies.

A Standard Life spokeswoman would not comment on any possible account launches. She also dismissed suggestions that the company might increase its 33 per cent stake in Bank of Scotland in order to challenge the Pru head-on.

But it is understood that the new account under consideration would target policyholders who are undecided as to where they want to place their money in the long term. Standard Life would offer rates of interest that compare with building societies.