New rules proposed for pension providers

Under new rules proposed by the FCA, pension providers could be required to give consumers a ‘stronger nudge’ in the direction of Pension Wise and offer to book then an appointment with the government-backed advice service.

Pension providers are already required to signpost scheme members to Pension Wise guidance and encourage them to use the service or to take independent financial advice.

The FCA says its new proposals would give savers ‘a further opportunity to take Pension Wise guidance. This will make it easy for consumers to book an appointment while they are already engaged in a conversation about their pension. The proposals would implement a requirement set by Parliament to encourage consumers to take Pension Wise guidance.’

The FCA is proposing that when a scheme member has decided they want to access their defined contribution pension savings, providers must refer them to Pension Wise guidance, explain the nature and purpose of Pension Wise guidance, and offer to book and appointment with the service.

Under the new rules, providers would also be required to confirm and record whether the scheme member chose to opt out of guidance, receive Pension Wise guidance, or received regulated advice.

While Parliament has chosen not to make these appointments mandatory, the FCA is keen to increase take-up. The regulator has released full details of its proposals in a consultation paper and is inviting firms to share other ideas on how to increase the take-up of Pension Wide beyond this nudge.

You can read the full consultation paper here.

For further details on this story, or any other compliance-related topic, contact our expert team on 01925 767888, or email helpline@ukgigroup.com.

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