03292017Wed
Last updateFri, 24 Mar 2017 12pm

 

FCA announces consumer protection ahead of pension freedoms

 

The Financial Conduct Authority (FCA) will be introducing additional protection for those accessing their defined contribution (DC) pension pot from April.

Under the new additional protection rules coming into force in April, firms will be required to ask consumers about key aspects of the circumstances that relate to the decision they are making about their pension pot, such as health and lifestyle choices or marital status.

The regulator has written to the Chief Executive Officers (CEOs) of pension providers to outline the plans, which will require them to give relevant risk warnings, such as warning of the tax implications of their decisions, in response to answers from consumers.

Firms must also highlight the availability the government’s new Pension Wise scheme or regulated advice.

Christopher Woolard, director of strategy and competition at the FCA, said that the decisions consumers make about what to do with their pension pot are "important" and in some instances "irreversible".

He added: "We want to make sure that people have the help they need to make those choices."

Firms will be required to deliver these messages in a direct and simple language which will be set out when the new rules are published.

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