We assessed whether firms are providing necessary information at the right time and in a way that helps customers make informed decisions when accessing retirement benefits and when reviewing whether their drawdown pension continues to meet their needs.
Who this applies to
Our findings are likely to be of interest to all firms offering pension savings and retirement income products, particularly those doing so on a non-advised basis. Consumer groups, trade bodies and organisations dealing with pensions policy may also be interested in the findings.
We assessed a sample of non-advised drawdown sales by firms covering approximately 74% of the market by sales volume for the period from April 2015 to April 2017; looking at all forms of communication with customers, including written, telephone and online.
What we found
- Firms are broadly meeting their obligations to communicate clearly with customers. Written, oral and online information is generally in line with our requirements and provides customers with the necessary information to make informed decisions about their retirement options.
- Sales processes are continuing to evolve with firms allowing online transactions and providing online tools and calculators to help customers make informed decisions.
- However, we found that some customers appear not to be fully engaging with the information and are therefore potentially putting themselves at risk of harm.
- We also identified some instances where firms in the sample did not fully meet our requirements.
Feedback has been provided to all firms that participated in the review. We have agreed actions with some firms and we will follow up to ensure that these are implemented.
Our findings will also help inform the Retirement Outcomes Review which will be published during the first half of 2018. Our findings and the Retirement Outcomes Review final report will also inform the FCA and The Pensions Regulator’s joint strategic approach to the pensions and retirement income sector, due to be published later this year.