The Government will introduce secondary legislation to allow workplace pension providers to side-step current direct marketing rules when recommending retirement solutions under the new targeted support framework.
The announcement was made in a joint statement by the Financial Conduct Authority (FCA) and the Information Commissioner’s Office (ICO), the UK data protection authority.
This confirms that the government recognises that the Privacy and Electronic Communications Regulations (PECR) present a barrier for workplace pension providers looking to offer targeted support options to members, particularly around retirement decisions.
These rules effectively bar financial services companies from sending product information to consumers who have chosen to opt-out of marketing campaigns, or have never made a positive decision to ‘opt in’. This might include many deferred members, who may be more disengaged with their pension savings.
It is estimated that these PECR rules could mean financial services companies would only be able to offer targeted support to around around one in four consumers.
The Investing and Savings Alliance (TISA) welcomed this decision, but said that this legislation needs to embrace more than just workplace pension providers.
TISA head of policy Sophie Legrand-Green says: “Today’s joint statement from the ICO and FCA is a helpful outline of current rules under PECR, but we are hurtling towards a major roadblock to targeted support’s success.
“The Government has recognised that PECR presents barriers for workplace pension providers and we welcome their announcement to bring secondary legislation to help these firms. However, the barriers posed by PECR impact all providers of targeted support.
“If we are to reach those who are most disengaged, we need to urgently fix this, or we risk millions of consumers being left languishing in the advice gap. This is beyond the scope of firms or the regulators, and we need Government intervention to unlock the full potential of targeted support by extending their proposals to cover all providers of targeted support.”
She adds that targeted support has the potential to be “a game-changer for how people interact with their finances”.
The new targeted support framework will be introduced in 2026, and will allow FCA-regulated firms to offer product suggestion to defined cohorts sharing certain characteristics. Trustee-based pension schemes won’t be included in the framework but can apply to the FCA to offer targeted support solutions.
