Banks and consumer groups need to develop simplified financial products to help consumers make the most of their finances, the Government said.
It is calling for a range of products to be introduced that have standard features, but not price caps, to increase competition and make it easier for people to shop around.
The Treasury said the first products to be developed should be a savings account and life insurance and income protection products.
It said savers currently faced a choice of 2,000 different savings products from 150 different providers. But it said key features often changed during the life of a product and this made it difficult for people to compare them.
Financial Secretary to the Treasury Mark Hoban said: "The Government is committed to helping consumers take responsibility for their finances."