FCA will consult on support for pension savers next month
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The Financial Conduct Authority will focus on pensions first in its advice guidance boundary review and will consult on high-level targeted support in December. In 2025, the regulator then wants to build on the pensions work, consulting on better support for consumers in retail investments and pensions.
The FCA has provided an update about its advice guidance boundary review, saying it will first focus on pensions, and within that on the option of targeted support. A majority of respondents considered it the best way of helping consumers at scale, according to its feedback statement.
“In December 2024, we will consult on high-level proposals for targeted support in pensions, which would allow firms we regulate to provide support to pension savers in a new way,” the regulator said.
Last December, it suggested three options to give greater support to customers who do not take regulated advice, having found that just 8% of adults reported taking financial advice over the previous year.
The three options were:
greater clarity about the advice guidance boundary so firms can move closer to it;
targeted support based on limited information about customers, assigning them to certain consumer types or groups; and
simplified advice, for consumers with less complex investment needs, which would however not be available for pensions.
While pensions will be first, by the end of the first half of 2025, the regulator plans to develop related proposals for targeted support in relation to wider investments and consult on the draft rules that will apply across consumer investment and pensions.
Together with the Pensions Regulator and the Information Commissioner’s Office, the FCA has also published a statement outlining the regulators’ position that firms and trustees can send regulatory communication messages to members, without direct marketing permission, if they use a neutral tone and avoid active promotion or encouragement.
What guardrails should be in place to ensure good outcomes for consumers receiving targeted support?
