Millions more people could get help
navigating their financial lives with support on pensions and
investments, under proposals announced today by the Financial
Conduct Authority (FCA).
The FCA's proposals would allow firms
to offer a new type of help called ‘targeted support' and make
suggestions to groups of consumers with common characteristics.
These could include people who may be currently drawing down on
their pension unsustainably, not saving enough for retirement or
who have excess cash sitting in a current
account.
The changes, which have inbuilt
protections for consumers, also support growth by enabling increased investment and
innovation.
Sarah Pritchard,
Deputy Chief Executive of the
FCA,
said,
“We want to help consumers navigate
their financial lives and plan for the long term. Some of the
most difficult financial decisions we face are how to save,
invest and prepare for a comfortable
retirement.
“These once-in-a-generation reforms
will help people navigate their financial lives and give them
greater confidence to invest. This is a win-win for consumers and firms
alike.”
These reforms should set the framework
for the next 20-30 years, to support consumers now as well as
future generations.
The FCA wants to see a thriving and
trusted market for full financial advice, simplified advice,
targeted support and guidance. Alongside today's proposals for
targeted support, the FCA has set out plans to reform the
framework for simplified
advice.
Consumer access to a choice of
guidance, targeted support, simplified advice and full financial
advice should help reduce the so-called “advice gap”. This
supports our ambition that consumers should have access to the
help and guidance that they need, at a cost they can afford, when
they need it, to make informed decisions about their financial
lives.
This advice gap is stark. Just 9% of
adults received financial advice about their pensions or
investments in the previous 12 months, according to the FCA's
latest Financial Lives survey (FLS
2024).
Of those who did not receive financial
advice, but hold £10,000 or more in cash savings, 24% said they
don't invest because they don't know enough about it, 12% because
they feel overwhelmed by the number of options available, and 8%
said they would need more support before they invest.
There are about 7 million adults in
the UK with £10,000 or more in cash savings who may be missing
out on the benefits of investing throughout their
lives.
The FCA has worked in a smarter way to
carry out this work, running its very first 6 week policy sprint,
where firms designed consumer journeys to help design the rules
in the consultation, with support from consumer representatives
and other members of the regulatory family. Detailed consumer
testing has also been completed, published alongside the
consultation.
The aim of this detailed sprint, and
consumer testing, has been to help then accelerate the period for
consultation, which is now open for 8
weeks.
The FCA is also working with the
government to help resolve issues that might prevent firms
communicating with consumers, with issues having been identified
early through the policy sprint.
The FCA committed to support growth in
its strategy. These
reforms are among almost 50 initiatives the FCA set out in
a letter to the Prime
Minister in January 2025, which the FCA is delivering against
this year.
Notes to Editors
If you wish to attend a background
briefing at 12.30pm 27 June about this announcement, please email
howard.wheeler@fca.org.uk
If you wish to have an embargoed copy of
the consultation paper and related documents please contact the
press office press.office@fca.org.uk
The FCA's Financial Lives 2024 survey
showed three in eight adults (37% or 20.3m) used information or
guidance in the 12 months to May 2024. Consumers will have used
one or more sources such as:
-
25% said they received guidance from
regulated firms or statutory bodies.
-
23% said they received guidance from
other professional bodies such as their workplace, private
sector money advice websites and traditional media,
to help them with decisions about
investments,
saving into a pension or
retirement planning.
Independent research commissioned by the
FCA showed that more than half of savers (54%) would welcome ‘a
lot' or ‘a little help' and support when they need to decide
whether to invest excess savings. In addition, 62% of existing
investors would welcome more help and support when it comes to
managing their investments, and 68% of existing investors would
welcome more help and support when reviewing investments to make
sure they are right for them. Retail Investments Consumer
Research, Thinks Insight, 2025.
