The Financial Conduct Authority (FCA) has proposed new rules to require pension providers to “nudge” consumers to Pension Wise for guidance.
Currently, pension providers are required to signpost consumers to Pension Wise guidance and encourage them to seek appropriate pension guidance or advice to help them understand their options. However, the FCA said take up of Pension Wise guidance remains low.
The watchdog’s proposals aim to benefit consumers with guidance before they access their defined contribution pension savings. This includes the provider booking an appointment with Pension Wise if the consumer wishes.
The proposals would implement a requirement set by parliament to encourage consumers to take Pension Wise guidance.
Sheldon Mills, executive director, consumers and competition, at the FCA said: “Pension Wise is a great service which helps people to understand their options when accessing their pension savings. We know that when people use Pension Wise they are happy with the service and find it helpful. However, few people are choosing to attend a guidance appointment.
“Our proposals will help to ensure that consumers get more information about the service, are further encouraged to use it and can have an appointment booked for them there and then.”
The FCA is proposing that when a consumer has decided, in principle, how to access their savings, a provider must:
While parliament has chosen not to make these appointments mandatory, there is a desire to increase take up.