Pensions and Retirement income: our guidance for firms

Read our guidance for pension providers and DB transfer advisers, as the coronavirus (Covid-19) pandemic develops. We are working with industry to ensure the market can deliver fair outcomes for consumers. This information was last updated in 2022.

We set out how firms can and should support consumers that seek to access to their pension savings during the current pandemic. 

Information for firms providing income drawdown

Given the difficult choices faced by consumers, it is as critical now as ever that consumers have access to appropriate pension products and are supported to make well-informed retirement income decisions. We want to ensure that firms provide well-governed pension products that are invested appropriately and deliver value for money.  These remain areas of supervisory focus. It is crucial that the sector continues to enable consumers to maximise their savings over the long term. 

During this time, many consumers may want to discuss their pension with their provider and providers will want to give them information that helps them make better informed decisions. We support this.

To help DC pension providers to have the right kind of discussions with their customers, we published guidance on 7 April 2020 that:

  • highlights what firms are already required to do by our Retirement Risk Warning rules (COBS 19.7), and   
  • supports firms in having meaningful conversations with their clients about the risks and implications of changing or accessing their pension in the current circumstances 

We have also published guidance for advisers providing advice on defined benefit (DB) pension transfers. This will help them enable consumers who are considering a transfer out of their DB pension scheme to make well-informed decisions.

Guidance on giving consumers pension information without ‘advice’ 

Here we provide guidance about how pension providers can have meaningful discussions with consumers about the risks and consequences of some actions without straying into providing advice.

Concerns about the economic impact of the coronavirus pandemic have led to stock market volatility. As a result, some consumers will worry that the value of the investments in their DC pensions may have fallen. 

At the same time, many may find themselves in an economically vulnerable position because of the pandemic.

These are understandably worrying times for consumers, who may seek contact their provider, to discuss:

  • whether the value of their pension has been affected, and why
  • changing their pension investments, or
  • accessing the funds held in their pensions

Providers may want to give their customers information that helps them make better informed decisions.  However, some providers and trade associations have asked us for guidance on what they can say to these consumers without inadvertently giving advice. 

We explain what firms are already required to do by our Retirement Risk Warning rules and how this may empower them to have the right kind of discussions with investors.

Communicating with customers

Unless they are willing to comply with the conduct requirements for personal recommendations, providers and operators (providers) should be careful not to provide regulated advice, even implicitly, by steering the consumer to a specific course of action on their investments.  Please see our Perimeter Guidance (particularly PERG 8) for more information on what kinds of communications are likely to be personal recommendations.

We think our regulatory framework provide ample scope for providers to have meaningful discussions with consumers about the risks and consequences of the actions they’re considering. Within the framework, providers can still help consumers understand the impact of their choices in the current circumstances. 

Customers contacting providers to access their pension funds

Providers tell us they are concerned that, in these uncertain times, some consumers might seek to access the funds held in their pensions, when they wouldn’t otherwise have done so, or without properly considering the downsides.

Our retirement risk warning rules (COBS 19.7) are not just a regulatory requirement. They give providers a solid footing to objectively present matters that their customers may need to think about before they can access their pension savings.  

When a consumer indicates they want to access their pension pot, even when the client has received pensions guidance or taken regulated advice, providers are already required to: 

  • signpost the availability of free and impartial pensions guidance from MoneyHelper's Pension Wise, which can be provided over the telephone
  • encourage clients to take regulated advice to understand their options at retirement
  • ask questions to identify factors that increase the risk associated with how the consumer has decided to access their pension savings
  • provide appropriate warnings to make the customer aware of the risks and implications of their chosen option

COBS 19.7.12G gives examples of risk factors that providers should look for. These are as relevant now as ever. Firms may need to revisit their risk warning processes to ensure that they are appropriate during the pandemic. 

Risk factors in the current climate 

Some risk factors might be particularly prevalent and relevant in current circumstances. This table will help you, as a provider, to look for them, suggest questions to ask and prompt you to make consumers aware of the implications. It applies in the exceptional circumstances of the coronavirus pandemic and its impact on pension savers. It is not intended to apply in other circumstances.

Providers should make clear that the warnings they give are not advice or a personal recommendation. They should also make clear that the customer should seek guidance or advice if they want to explore the risks and the options in more detail.

Risk factors that providers should look for…

Providers should ask questions to find out whether…

Providers should make consumers aware of the implications…

Sustainability of income in retirement

Investment risk (in general)

Tax implications



the customer is accessing their pension pot to prevent further investment losses from coronavirus related market volatility


  • Making decisions about your pension based on short term events and circumstances can have long term consequences for your financial wellbeing and retirement. 


  • Before taking any major decisions about your pension, take the time to get independent guidance or advice. 
  • If you access your pension savings now, you might miss out on any increases in value in the future if markets recover.


  • You will receive only the current value of your pension investments (which might have fallen recently), and this may be taxable [there may also be charges or deductions, where applicable].
  • Locking in this loss now could reduce how much money is available to generate the income you may need in later life.


Sustainability of income in retirement

Investment risk (in general)


Tax implications


the customer is in financial distress because of the coronavirus circumstances.

the customer is entitled to employment and financial support available through the government

the customer has access to other savings or income sources that do not incur tax or other penalties on access




  • Making decisions about your pension based on short term circumstances - especially at a time of market volatility - can have significant long-term consequences for your financial wellbeing and retirement.
  • If you have other sources of finance, depending on what these are, there may be fewer long-term risks if you access those first.


  • The financial support available in the current circumstances, (including your rights to sick pay, what benefits you can claim if you’re self-employed or not entitled to sick pay) is explained on the MoneyHelper website
  • The debt advice locator tool on the MoneyHelper website can help you find out where to get free debt advice.


  • Tax implications (see below)
  • If you access your pension savings now, you might miss out on any increases in value in the future if markets recover.


  • Pensions are designed to fund your expenses in the future.  If you take funds from your pension now, you may not be able to generate the income you need in later life. 

Tax implications

the customer plans to continue/resume contributing to this or other pensions.

  • If you take some (or all) of your pension as income now, but plan to save more into a pension in future:
    • you can continue to receive tax relief on contributions paid in up to age 75, but  
    • you will only be able to save £4,000 a year before you are taxed.


Tax implications

the customer plans to access more than 25% of their pot

  • You can normally choose to take up to 25% of your pension pot tax-free. 


  • Depending on how you withdraw funds from your pension, the rest could
    • be subject to income tax
    • move you to a higher income tax band (meaning you would pay more tax and receive less money)


  • Taking the whole pot as cash could result in a large tax bill – for most people it will be more tax efficient to use one of the other options.
  • Get guidance or advice before you commit.



the customer is accessing their pension pot to invest in something that bears the warning signs of scams, eg

  • unusually high rates of return
  • special offer
  • pressure to act quickly
  • Like anything valuable, your pension can become the target for illegal activities, scams or inappropriate investments.


  • Scams can take many forms and often appear to be a legitimate investment opportunity
  • The regulators recommend 4 simple steps consumers can take to protect themselves from pension scams:
    1. Reject unexpected pension offers whether made online, on social media or over the phone.
    2. Check who you’re dealing with before changing your pension arrangements – check the FCA Register or call the FCA helpline on 0800 111 6768 to see if the provider you are dealing with is authorised by the FCA.
    3. Don’t be rushed or pressured into making any decision about your pension.
    4. Consider getting impartial information and/or advice

Customers contacting providers to change and de-risk their investments

Providers tell us that at this time of market volatility, some customers (both in accumulation or decumulation) might want to change the investments held in their pensions to prevent further losses.  Providers are concerned that customers might make these changes without properly considering the downsides.

We remind firms of their obligations under the client’s best interest rule, and other expectations in COBS 19 to act in the best interests of their customers. Firms must also have due regard to their customers’ information needs, and communicate in a way that is clear, fair and not misleading. 

So, where a provider is concerned that a customer is making a decision that is not in their best interests, bringing this up with the consumer would be in keeping with its obligations.

Warning the customer about relevant risks to bear in mind would not amount to a personal recommendation, so as long as it is clear from the language and context of the warning that the firm wants to ensure the consumer makes a considered and informed decision. In contrast, if the warning involves the firm trying to guide the consumer towards a particular investment strategy, then this will likely amount to advice.

Examples of warnings

In our guidance for firms on warning consumers about the implications of realising investments, we have given examples of warnings which would not, in our view, amount to the giving of a personal recommendation

For customers already taking an income from their pension, it may be appropriate for firms to warn them about the impact of such investment changes on sustainability of income over the longer term. Impartial guidance from The Pensions Advisory Service or financial advice (from an FCA-regulated financial adviser) can help consumers make an informed decision.

Providers contacting customers

Some providers have asked about communicating with consumers proactively, for example by providing additional information with planned communications in the coming weeks and months. For example, annual benefit statements for customers in accumulation or the annual communications required under COBS 16.6. for customers in decumulation. 

We believe firms can provide additional balanced information where they consider it meets a current information need.  This additional information could, for example, address customers’ potential questions and concerns in the current circumstances.  But this information should not implicitly steer customers to a specific course of action on their investments. And providers should not use this as an opportunity to promote their other products and services. 


We have spoken to the Financial Ombudsman Service. It has confirmed that, in deciding what is fair and reasonable in all the circumstances of a complaint, this note would be one of the things that it will take into account if a customer brings a complaint about the firm’s communications on surrendering investments at this time.

Guidance on our expectation of advisers giving defined benefit pension transfer advice 

This sets out what we expect from advisers giving defined benefit pension transfer advice during the current coronavirus (Covid-19) crisis.

The coronavirus crisis may mean more consumers take advice about transferring out of their defined benefit (DB) pension scheme to a defined contribution (DC) pension scheme. We continue to expect firms to provide suitable advice, and to follow the existing Handbook rules and guidance, in particular those set out in COBS 9, COBS 19.1 and COBS 19.2.2R

Demonstrating transfers are suitable

We expect advisers to start from the position that a firm should only consider a transfer is suitable if it can clearly demonstrate that, on contemporary evidence, the transfer is in the client’s best interests. In all cases, we expect advisers to demonstrate that they have gathered the necessary information to know their client and understand their client’s needs and objectives.  

While it may be more difficult in the current crisis to get information about a clients’ personal or financial circumstances, or about their pension schemes or other investments, firms must not make a personal recommendation if they do not have all the necessary information (COBS 9.2.6R).

Addressing customer misconceptions 

Firms should not assume that changes in circumstances due to the coronavirus make a transfer more likely to be suitable for individual clients. Firms should also address any misconceptions clients may have as a result of the crisis. For example, clients may think:

  • ‘Cash equivalent transfers (CETVs) are at an all-time high’. Firms should not assume that increases in CETVs automatically improve client outcomes if a transfer proceeds. They should consider the client’s circumstances and attitude to transfer risk if DB schemes offer larger CETVs.
  • ‘Death benefits will be better in a DC scheme’. Firms must adequately consider how death benefits are provided by the DB scheme and the proposed DC arrangement throughout retirement. They should also consider alternative options, such as term life insurance, and any tax implications, especially if a client has a life expectancy of under 2 years.
  • ‘My employer is going under, so my pension scheme will too’. Firms are generally not experts in employer covenant assessments. So where clients have concerns about the sponsoring employer continuing in business, they must provide a fair assessment of the benefits of the Pension Protection Fund.

Transferring against advice

Firms may also see more clients who want to transfer against advice they received before the crisis. In these cases, firms should consider whether the client’s circumstances have changed and if it is appropriate to re-visit the advice. Firms should also repeat key warnings in their earlier advice and ensure that clients understand the advice they were given.

Where firms agree to transact with clients on an insistent basis, they should follow the guidance set out in COBS 9.5A. In particular, they should consider how the risks of proceeding to transact may have changed since the client was given the original advice.  Firms should retain records of the advice and transaction process they followed, including the communications with the client.

TPR guidance

The Pensions Regulator (TPR) has issued guidance for trustees. As part of maintaining competence, we expect firms to ensure that relevant staff keep up to date with any guidance TPR may issue that has an impact on the advice process. 


We have spoken to the Financial Ombudsman Service, which confirmed that, in deciding what is fair and reasonable in all the circumstances of a complaint, this note would be one of the things that it will take into account if a customer brings a complaint about the firm’s communications on surrendering investments at this time.

Consumer information

We have published a joint statement with TPR and The Money and Pensions Service urging savers to stay calm and not rush into  making any decisions about their pension in response to the coronavirus.

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