The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA) are urging trustees and pension professionals to take proactive steps to help savers make the right retirement choices, as the FCA’s Targeted Support consultation nears its close.
In a joint podcast, Nike Trost, the FCA’s Head of Department – Asset Management and Pensions Policy, and Patrick Coyne, Interim Director of Pensions Reform at TPR said the industry needs to develop a much deeper understanding of the diverse needs and profiles within their scheme membership. They called for innovation in designing retirement income solutions tailored to different saver types to ensure savers make the right decisions at retirement.
They also highlighted that the FCA’s proposals, which allow firms to make targeted recommendations for groups of consumers, and the Pension Schemes Bill plans for guided retirement solutions, are complementary policies. Trustees are encouraged to respond to the consultation before it closes.
The podcast emphasised the importance of using data such as age, pot size and retirement proximity to deliver personalised communications, nudges and fit-for-purpose decumulation solutions.
Meanwhile, a Corporate Adviser report underlines the importance of recognising savers’ beliefs when choosing retirement products. Many Muslim retirees are unknowingly buying conventional annuities that are not Shariah-compliant, as these rely on interest-based mechanisms.
The report calls for clearer communication and greater availability of Shariah-compliant options, such as sukuk-backed funds, to help Muslim savers access retirement solutions that align with their faith.
Coyne says: “Millions could be drifting toward an uncertain retirement. Government data shows over 14 million people are under-saving for later life. That is why we have to make sure the system provides them real value for money and that people are supported into the right retirement pathway for them. Nobody saves into a pension expecting a pot, they expect a sustainable retirement income and with these reforms, and the revived Pensions Commission, we have a real chance to make that happen. We know trustees want to support members, but uncertainty around the advice boundary is a real barrier. Now’s the time to share examples and help shape future rules.”
Trost says: “I think there being more support available for consumers both in their savings journey and importantly, at the point of retirement, has to be the success we aim for. It’s about consumers being offered really good product choices to choose from in a really simple way.”
