FCA updates retirement income market study
The Financial Conduct Authority (FCA) has today published an update setting out its current and on-going work on the retirement income market. As part of this update, a revised Terms of Reference for its market study into retirement income has been published. The update follows changes made to the pension and retirement income landscape announced by the Government in the Budget on 19 March 2014.
Over 15% of the helpline enquiries received by the Pensions Advisory Service are regarding the retirement decisions, which clearly indicates that people struggle dealing with the choice they have regarding their pension plan. On receiving their retirement pack, people do not know where and how to start thinking about their retirement.
Michelle Cracknell, Chief Executive of The Pensions Advisory Service, said “We aim to guide people by getting them, to think about their personal situation and what they want and need to achieve in retirement income. We also try to stop people thinking about just the one plan or scheme that they may have received details of but instead, audit all of their resources that will provide retirement income.”
Retirement decisions are so important and it is vital that the market operates correctly to ensure that people have the best chance in choosing the options that is best suited to their needs.
The FCA announced the market study in February after its research found that the annuity market was not working well for consumers with eight out of ten of those not shopping around and switching potentially missing out on a more generous income.
While the overarching objective of the market study remains to assess whether there are obstacles to competition working more effectively for consumers, in light of the Budget announcement the FCA have revised its scope to give it a more forward looking focus. This will allow us to understand developments in the new landscape and identify any competition risks and potential consumer detriment.
The Budget announced plans for a guidance guarantee, on which the Government is currently consulting. The FCA is working with Government and stakeholders to develop the framework for the impartial guidance guarantee which will be offered to individuals at retirement from April 2015.
If you have any questions about your pension saving and retirement plans you can contact one of our technical team on 0845 601 2923 or via our webchat tool.
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