Pension freedoms under scrutiny
6th October 2017
The Financial Conduct Authority (FCA) is the regulator for over 50,000 financial services firms and UK financial markets. They closely monitor the marketplace to ensure there is adequate protection for consumers.
An area of particular interest is pensions and the FCA has undertaken a review and produced an interim report on retirement outcomes. This follows the implementation of significant rule changes introduced two years ago, which allow individuals to be able to access their defined contribution pension savings however they wish.
The regulator has raised concerns over the following issues:
- Many consumers have fully withdrawn their pension pots and moved the funds into savings elsewhere, partly driven by lack of trust in pensions
- Consumers who access their pension pots early without taking financial advice typically follow the path of least resistance, accepting a drawdown arrangement from their pension provider without shopping around
- Many consumers buy drawdown arrangements without taking any financial advice, but struggle with the complexity of the decisions they have to make
- Providers are continuing to withdraw from the open annuity market, restricting choice and competition
- There is limited innovation for the benefit of consumers
As a firm of independent financial advisers, Armstrong Watson Financial Planning actively follow regulatory developments and commentary and participate in providing feedback on the areas where we actively offer financial advice and have put forward our views based upon our own experiences. We welcome the review the regulator is undertaking and seeking feedback upon and look forward to reading the final report which they plan to publish in the first half of 2018.
Pensions and retirement planning is an area which we write about regularly in our blog pages, which you can visit here: http://www.armstrongwatsonfp.co.uk/blog/pensions-and-retirement. You can also view our essential guide to the pension freedoms here or pick up a copy from one of our offices.
If you require any advice on your retirement options, please contact our Financial Planning Consultants who are both authorised and regulated to provide financial advice. Our team can be contacted on 0808 144 5575 and at any of our office locations across the North of England or South Scotland.
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