"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 FCA
The FCA has set out the next steps in its work on closing the advice gap as part of the Advice Guidance Boundary Review.
In December 2023, the FCA and the Government put forward proposals on how they could better ensure there was affordable support for people to navigate difficult financial and investment decisions, to meet a variety of needs, in easy-to-access ways.
The FCA has now revealed that its first consultation, in December 2024, will focus on pensions support.
In a statement, the FCA said: "Consumers increasingly rely on defined contribution (DC) pension savings and must make complex decisions in relation to these, including how to access their pension savings. This is one of the most important financial decisions they will make.
"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."
Building on its pensions work, in H1 2025, the regulator plans to consult on rules for better support for consumers in retail investments and pensions.
The FCA’s approach
Automatic enrolment has significantly increased membership of DC pensions. Many engage with their pensions for the first time as they approach retirement. With DC pensions a growing source of retirement income (the total number of DC pension plans held by FCA-authorised firms accessed for the first time in 2023/24 increased by 19.7% to 885,455 compared to 2022/23) the FCA says "there is a particular need for support in relation to pensions".
As a result, the FCA’s first consultation, in December 2024, set out how it envisages targeted support, including research on consumer interest, working for pension savers.
By the end of H1 2025, the FCA plans to develop related proposals for targeted support in relation to wider investments and consult on the draft FCA rules that will apply across consumer investment and pensions.
The FCA says it will "keep an open mind to test whether targeted support and simplified advice will achieve the aims of this work" – which are that consumers have access to the help they want, at a time they need it and at a cost that is affordable so they can make informed decisions.
Over 85% of investment adviser firms employ 1 to 5 advisers. The FCA will therefore engage directly with small advice firms in 2025, through a series of roundtables around the country, to gauge the willingness and capacity of these firms to offer a simplified advice service.
