FCA reports on annuities sales practices and retirement income market
11 December 2014
The Financial Conduct Authority (FCA) has issued a report into sales practices and consumer behaviour around pensions, calling for significant improvements if people are to understand their options as the Government’s pension reforms take effect.
The FCA are concerned that many individuals will not appreciate the choices available to them, and may therefore be induced to make unwise decisions. The principal recommendations in the report are:
· Requiring firms to make it clear to consumers how their quote compares relative to other providers on the open market.
· The introduction of a behaviourally trialled alternative to the current system of wake-up packs. This would build on work already underway and feed into our work considering how we will replace the ABI Code with FCA regulation.
· Recommending that the pension guidance service and firms take account of the findings of the market study on consumer behaviour when designing tools to support decision-making.
· In the longer term, recommending the development of a ‘Pensions Dashboard’ which would allow consumers to view all their lifetime pension savings in one place.