The briefing paper lays out the evidence for a deliberative public engagement programme which will explore a range of perspectives on targeted support, along with the concepts of consumer choice, consumer protection and consumer best interest in accessing a defined contribution (DC) pension.
71% of people accessing their DC pension receive information, advice or guidance from a financial adviser, their pension provider or Pension Wise before doing so. However, the FCA’s latest reporting period (2022) found only 8% of UK adult received full financial advice, leaving a significant gap between people receiving paid-for personalised advice and those accessing free guidance, which is largely generic factual information.
What is targeted support?
Targeted support, as proposed by the FCA, looks to fill the middle ground, allowing authorised firms to harness customer data to provide a new form of tailored support to groups of people with similar circumstances – ‘best interests’ suggestions. Targeted support could apply to a range of financial decisions, including decumulation decisions by DC savers.
The FCA plan to consult on the high-level proposals for targeted support imminently.
Catherine Sermon, head of public engagement and campaigns at Phoenix Insights, comments: “At retirement many people suddenly face huge decisions about how to use their pension pot after a lifetime of potentially very little engagement with their savings. Some choose to take professional financial advice if they can afford to do so, and the remainder, if they use anything at all, access freely available guidance services which provide helpful support but isn’t personalised to individual needs or circumstances. Targeted support could enable firms to provide more tailored support to customers so they are better informed to make decisions. This would be a big change from the status quo, and we believe it’s vital to understand more about how people would use this, to understand any risks, and work to ensure the best outcomes for savers. Our research is designed to bring informed individual consumer voices into this discussion.”
|
