The Financial Conduct Authority (FCA) has today written to the Chief Executive Officers (CEOs) of pension providers to outline plans to introduce additional protection for those accessing their defined contribution (DC) pension pot from April.
Under the new additional protection rules 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. These include issues such as health and lifestyle choices or marital status. This will come into force from April.
Providers will be required to give relevant risk warnings, such as warning of the tax implications of their decisions, in response to answers from consumers. Firms must also further highlight the availability of the Government’s new Pension Wise scheme or regulated advice.
Christopher Woolard, director of strategy and competition at the FCA said:
"The decisions consumers make about what to do with their pension pot are important and in some instances these choices are irreversible. 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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