On 19 March 2014 the Chancellor announced substantial changes to the pension legislation in the Budget. Some of these changes came into effect on 27 March 2014, and a further set of changes are in consultation and are proposed to be introduced in April 2015.
In light of these policy announcements, firms will need to make changes to their operational processes and procedures. They will also need to consider how to treat customers who are making a decision about their retirement income in the coming year.
We have therefore decided to issue guidance to outline our expectations of firms during this interim period (i.e. from Budget 2014 to April 2015).
Who is this guidance aimed at?
This guidance is likely to be of most relevance to pension providers – both insurers and SIPP operators, annuity providers, income drawdown providers, financial advisers providing retirement income advice and intermediaries selling annuities and income drawdown products on a non-advised basis (including comparison websites, brokers and investment platforms).
Summary of the key issues
We believe that some customers may be put at a disadvantage if they do not know about the Budget changes or if they cannot take advantage of them if they so wish.
We want to ensure customers are making informed decisions about their retirement in light of the Budget changes, so we are issuing this guidance to firms.
Many firms are already making changes to their processes and procedures and are highlighting the changes at Budget to their customers, which we welcome; we have drawn out some of these as examples of good practice in our guidance. Some firms have asked us for clarification of our expectations in this period, which this guidance provides.
What are the next steps?
We would welcome feedback and comments from the industry and consumer organisations on this guidance.
Please send your responses by email to [email protected].
Alternatively, please send your responses by post:
The Life Insurance Themes team
The Financial Conduct Authority
25 The North Colonnade