• March 29, 2024
 FCA invites views on pension pot protection measures

FCA invites views on pension pot protection measures

A consultation has been launched by the Financial Conduct Authority (FCA), proposing a number of measures to protect consumer pension pots.

Released today, the package of proposals included are designed to improve engagement within the retirement income market as well as to promote competition.

Its launch accompanies the publications of the Retirement Outcomes Review final report, also from the FCA. This took a detailed look at the pensions and retirement income sector, considering how it had been operating since the introduction of the pension freedoms.

The regulator reported that although the freedoms have largely been embraced, some consumers are at risk of harm.

As an example, the FCA said that – according to its estimations – some drawdown customers could boost their retirement income by 37% each year if they invested a mix of assets rather than cash.

The measures, which include simplifying the ongoing communications received by customers as well as the options they have, aim to help consumers at key points when making decisions about their pension pot. Further, they also intend to deliver support on a continual basis once pension savings have been accessed.

Commenting on the proposals was Christopher Woolard. The Executive Director of Strategy and Competition at the FCA said: “We know that the choices introduced by the pension freedoms have been popular with many consumers. However, they’re now required to make more complicated decisions than ever before. Many people need more support when making choices. The measures we have outlined today will help them think about that earlier, create investment pathways to help them with their choices and make costs and charges easier to understand.

“This is an important market that is still relatively new and is continuing to evolve. This is not the end of the work we are doing and we will continue to keep the market under review as it develops.”

The FCA invites firms providing pensions, annuities and income drawdown to share their views on the suggested measures, as well as stakeholders who possess a relevant interest.

Comments on proposals for discussion are open until 9 August and views on proposals for consultation will be accepted until 6 September.

The consultation can be accessed here.

Georgia Owen

Georgia is the Senior Content Executive and will be your primary contact when submitting your latest news. While studying for an LLB at the University of Liverpool, Georgia gained experience working within retail, as well as social media management. She later went on to work for a local newspaper, before starting at Today’s Wills and Probate.