You are here: Home - Retirement - Retirement planning - News -

Regulator turns its attention to the private pensions market

Written by:
The Financial Conduct Authority has launched a consultation into the £400bn private pensions market, as SIPPs become increasingly popular.  

The FCA said that at least one in four adults have accumulated benefits in non-workplace pensions and it wants to understand whether competition is working well and if there are issues that need to be addressed in order to protect consumers.

Christopher Woolard, FCA executive director of strategy and competition, said: “In recent years we, alongside the Department for Work and Pensions and The Pensions Regulator, have taken a number of steps to address weaknesses in the workplace pensions market. We believe it is now right to look at the other side of the picture and assess whether competition is working in non-workplace pensions.

“A diverse group of people save into non-workplace pensions and it is a growing market. We want to hear from anyone with an interest in this subject about how they think the market is working.”

In particular, the FCA is looking to focus on product complexity, factors which may reduce consumer motivation on pension decisions, whether customers can identify and freely move to more competitive products and fund choice and the use of defaults. The regulator will also look at whether providers are competing on charges and if there are barriers to consumers identifying, and choosing, from more competitive products.

Tom Selby, senior analyst at AJ Bell, said: “Following the OFT review of the workplace market and the growing popularity of SIPPs in the wake of the pension freedoms, it makes sense for the FCA to scrutinise competition in the non-workplace market.

“It is vital for the integrity of the UK pension system that savers are confident the products they invest in are value-for-money. Furthermore, our own research points to an engagement gap emerging in the post-pension freedoms world, with many savers completely in the dark over how their retirement pot is invested.”

Tom McPhail, head of policy at Hargreaves Lansdown added that the character and size of the non-workplace pensions sector has changed significantly in recent years, with the bulk of new arrangements set up in recent years being SIPPs.

He said: “There’s evidence many investors are actively engaging with their savings, making choices about how their money is managed and invested. There are also understandable regulatory concerns about legacy books of business and ‘forgotten pensions’. This discussion paper will be a good opportunity to explore these issues.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co... Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
City of London skyline
Affordability of city homes falls to 10-year low

City house prices are now seven times average salaries, making it a huge challenge to get on the ladder without...