Pensions - Articles - FCA decision to hike FOS compensation limit is shocking


The announcement today by the FCA that it is planning to more than double the compensate limit at the Financial Ombudsman Service to £350,000 has been condemned as ‘shocking’ by Royal London Director of Policy, Steve Webb.

 In the Policy Statement the FCA has been forced to admit that rather than 2,000 people potentially benefiting from the higher cap each year, only around 500 people are set to do so. And in the same document it admits that in a worst case scenario, hikes in Professional Indemnity Insurance costs for advisers could lead to around one thousand advice firms pulling out of the market for pension transfer advice. This will make it much harder for those considering a transfer to get advice.

 Commenting, Steve Webb said: ‘The FCA has been forced to admit that it got its numbers wrong and that just 500 people a year might benefit from this change. But the risk is that the insurance which advisers are obliged to buy will more than double in price and could drive up to a thousand firms out of the pension transfer advice market altogether. There is already clear evidence that PI insurers have been hiking premiums in anticipation of this policy change. Yet the FCA is pressing on regardless. This is a shocking decision. If far more members of the public are unable to access advice then this will be counter-productive and consumers will lose out as a result’.
  

Back to Index


Similar News to this Story

Saga comment on the Royal Mail CDC pension scheme
Following Work and Pensions Secretary, Amber Rudd, welcoming plans for the Collective Defined Contribution (CDC) pension scheme to be introduced in th
CPI 12 month rate increases but still lower than BOE target
Following the publication of the Consumer Prices Index (CPI) 12-month rate for February, please see the below comment from Kate Smith, Head of Pension
The pensions quiz reveals if you are prepared for retirement
Back in 2016, pensions advice specialist, Portafina, set out to find what the nation knew about their pensions. Now, three years on, Portafina asked a

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.