The long-awaited Sandler Review of the UK retail savings market has the potential to deal a devastating blow to the life assurance industry, leading to market consolidation.

Analysts and consultants believe the proposals, if pushed through, will be expensive for life insurance companies to implement and may even cause them to lose market share to banks and retail investment houses. The life assurance industry is already struggling to cope with the global equity market slump and tightening restriction on annual charges through stakeholder products.