The proposals are part of a wider review (the Advice Guidance Boundary Review) by the FCA and UK Government to ensure consumers can receive the help they need to make informed financial decisions at an affordable cost.
In Consultation Paper 24/27 published yesterday (Thursday 12 December 2024), the FCA notes that the shift from defined benefit to defined contribution pensions and the introduction of pension freedoms have increased individual responsibility for retirement planning. “The choices we make about our pensions – how much to save, what we should invest in and how to access them – determine our comfort and security in later life. That is why it is vital that people have access to the right support to navigate complicated decisions.”
The Consultation Paper 24/27 outlines plans to introduce a new form of regulated support called “targeted support” to help consumers make informed decisions, including that:
Firms are encouraged to offer targeted support free at the point of use to maximise accessibility. Costs may be recovered through cross-subsidies but firms must ensure fair value for all customer groups if they do this.
Discussion Paper 24/3 was published alongside the consultation paper to gather feedback on potential changes needed to ensure the FCA’s regulatory framework can “meet the needs of pensions savers, from the most engaged to those who find engagement challenging”.
The FCA has asked for initial feedback on the direction proposed in Consultation Paper 24/27 by 13 February 2025. Rules on a targeted support framework would then be expected to follow in Summer 2025. Feedback on Discussion Paper 24/3 is requested by 27 February 2025.
These papers will be particularly relevant to providers of personal pensions as well as stakeholders with an interest in the pensions and retirement sector.
