Customers will receive more guidance and information when purchasing retirement products, under new proposals from the Financial Conduct Authority.
Chancellor George Osborne shook up the pensions market in his 2014 Budget, when he announced that retirees would no longer be required to purchase annuities with their pension pots. The new pensions rules, which came into effect in April, mean people can invest their money in other products, or spend the cash.
The watchdog today set out a series of proposals “designed to ensure that the pensions market works well for consumers”, which include requirements for firms to help customers shop around and ensuring people have the ability to make informed decisions.
Another proposal from the regulator is restricting the promotion and distribution of high risk investments.
The FCA has also asked for views on other areas where further action could be taken including payment for arranging the sale of non-advised annuities.
Christopher Woolard, director of strategy and competition at the FCA, said: “Pensions are of fundamental importance and it is vital that the market works well for consumers. Our proposals today are designed to ensure that consumers have access to products and services that are well governed and deliver value for money following the government’s pension reforms.”
He added: “We will continue to monitor the market as it evolves following the introduction of the government’s pension reforms to ensure that firms are helping consumers get the best outcome in retirement.”