“Pension freedom rules have multiplied the options available to retirees so it is important the FCA fully understands how this more complex market is functioning and whether it is delivering good value. We are just over a year into the new rules and some of the early research from the FCA itself and other bodies such as Citizens Advice has not been too encouraging with a fall-off in the proportion of people shopping around.
“We welcome the terms of reference which show the FCA is determined to do a thorough job understanding the extent to which consumers understand the new options and can make informed decisions when comparing products and switching between them. In particular we welcome the focus on non-advised customers which is where the biggest changes of behaviour are being seen. If done well, non-advised services can deliver real mass market benefits – done badly, they can just be a tool to drive internal product sales.
“The consumer research also published today by the FCA illustrates that point. The way you present information to consumers has a huge impact on the decisions they make. Offer them personalised information and they are far more likely to act on it and shop around for better outcomes. Offering generic or too much information is not so effective. It’s an important piece of research that demonstrates that encouraging people to make better decisions doesn’t have to be rocket science but does need to take into account how people behave in the real world.
“The terms of reference for the Retirement Outcomes Review are wide ranging and comments have to be back with the FCA by the end of August. This document could set the tone for how the market will operate for years to come so it is important we all contribute to the debate.”
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