The Financial Conduct
Authority (FCA) has found that people holding legacy pension
products, now closed to new savers, could be receiving
poorer value than those in newer
ones.
The regulator identified some good
practices, but complex charging
structures, older product design and weaknesses in
firms' data meant some pension savers are not
getting as much value as they could.
What good looks
like
Some unit-linked non-workplace pension
providers are working to simplify or rationalise their legacy
products and funds, or have
plans to do so. There was evidence of firms capping or reducing
charges for customers in legacy products. Some were also
comparing outcomes across different customer groups and products,
and moving customers to better-value alternatives.
The FCA is now calling on all pension
providers to consider the report and take on
the good practice identified. The regulator is also
engaging with firms on barriers they face in improving
the value for customers, particularly in closed
books.
Charlotte Clark, director of
cross-cutting policy and strategy at the FCA, said:
"Consumers in older products should
not be left behind, and the good news is that some firms are
already showing it doesn't have to be this way. We want to see
that progress reflected right across the
market.
This work supports wider reforms, including targeted
support and pensions dashboards, to help consumers get the most
from their pensions. It is also a priority under the
FCA's Pensions Regulatory
Priorities and
forms part of its broader work on modernising pensions
and long-term savings.
Notes to editors
