We have published the final findings of our Retirement Outcomes Review, which looks at how the retirement income market is evolving since the pension freedoms were introduced in April 2015. As part of this, we set out a package of proposed remedies to address the concerns identified.
The final findings report includes 5 annexes:
We have subsequently published Policy Statement 19/1 which sets out the new rules and guidance on our first package of remedies from the Retirement Outcomes Review.
We have also published Consultation Paper 19/5 which sets out our second proposed package of remedies from the Retirement Outcomes Review. For these remedies, we are consulting on proposed changes to our rules.
This market is still developing and firms and consumers are continuing to adjust to the reforms. The freedom and choice introduced by the pensions freedoms have been popular, but have also required people to make more complicated decisions about retirement than previously.
Defined Contribution (DC) pots are still relatively small for most current retirees and are often not their main source of retirement income. However, with the decline of Defined Benefit (DB) schemes, many consumers will rely increasingly on DC pots as a major source of retirement income over the medium and long term.
Our review focused on those consumers who do not take advice – and our evidence shows that some consumers are at risk of harm. We found that:
Our new rules and guidance and our second proposed package of remedies aim to address the harms and emerging issues we have identified, and to put the market on a good footing for the future. They balance the need to protect consumers and improve competition in the market, with allowing the market to further develop and innovate.
We have taken steps to protect customers and help them make better choices – before accessing their pension savings, at the point of making a decision, and throughout their retirement.
Before consumers access their pension savings, we want to improve the effectiveness of consumer communications and ensure consumers access the support or guidance they need.
We have changed our rules on ‘wake-up packs’ so that they reach consumers at the right time to inform their decision, and are more useful to them.
‘Wake-up’ packs will now:
We are also consulting on the following proposals:
We are also working closely with the Money Advice Service (MAS) and the Association of British Insurers (ABI) to develop a drawdown comparator tool.
Once a consumer has entered drawdown they still need information and support.
We are consulting on:
This summary provides a brief overview of the key points from the interim report and may be enough detail for some readers:
For a more in-depth description of our findings and proposed remedies you can read the full interim report:
The interim report included 5 annexes:
See our Retirement Outcomes Review: infographic (PDF)