Pensions - Articles - EY Comments on the FCA annuity reports


Jason Whyte, Director in Financial Services at EY, comments on the FCA’s findings of its work into annuities sales practices and the retirement income market:

 “The FCA’s proposed remedies look like a step in the right direction, but the regulator also rightly recognises that they are only a beginning and will need to evolve over time. The finding that the retirement income market has not been working well shouldn’t come as a surprise to anyone in the industry.
  
 “The FCA’s claim that an annuity at the best market rates can offer good value compared to alternative options is a timely reminder that they may still have a role to play in securing people’s retirement. However, the regulator also recognised the enormous challenge in helping people to make good decisions based on the new choices that are available. The difficulty of judging how long they might live or the impact of stock market conditions should not be underestimated, as well as the sheer complexity of understanding and comparing different options. There are also some sound, but hard to quantify, reasons why a customer might opt not to annuitise. For many customers with small pots, a minor increase in monthly income might mean less to them than having a fund on hand for emergencies.
  
 “However, while the FCA talks about working with Government and the Money Advice Service (MAS), there is a question about whether it is missing an opportunity in not talking about how it can work with providers to get this right. The impending changes represent a once-in-a-generation chance to fundamentally rethink how the financial services industry engages with consumers, and providers are already thinking hard about how to achieve good customer outcomes. Many firms currently feel constrained by regulations that were designed for a very different environment, and would welcome an approach from the regulator that would help them to achieve better customer outcomes, but feel that they are not getting the necessary guidance.”
  

Back to Index


Similar News to this Story

The importance of pensions to the economy
Commenting on the Chancellor’s Mansion House speech last night, Hannah English, Head of DC Corporate Consulting says: “While last night’s speech was u
Comment ahead of Pensions Review on Adequacy
The long-awaited Pensions Review on adequacy is expected to be launched before Parliament rises for Summer Recess next Tuesday, 22 July 2025, accordin
Sole trustees are now almost half of all PIT appointments
42% of Professional Trustee appointments to DB Pensions Schemes were sole trustees by March 2025, an increase from 37% in 2024 according to the latest

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.