The FCA is to encourage DC pension providers to offer targeted support to improve consumer decision-making ahead of the launch of Pensions Dashboards.
The regulator has included a push towards targeted support in its highest priorities for the contract-based DC market which it regulates.
It has included the targeted support plans within its new Regulatory Priorities publication published this week.
It currently regulates schemes/providers which account for around £1.36trn total assets within the £3trn pension market (FCA retirement income market data 2024/25).
It said that low customer understanding and engagement continued to be a challenge within the pensions market, contributing to concerns about adequacy.
The regulator said: “We want to support firms who wish to provide targeted support to do so, and expect others to consider how they can better support non-advised consumer understanding and decision making as the market changes. Having the right support available will become even more important once dashboards are available, as we hope this will increase the engagement that consumers have with their pensions.”
From 6 April banks, pension providers, or other financial firms that are authorised for targeted support, will be able to provide financial suggestions designed for groups of consumers with common characteristics.
The other main focus for the regulator in its regulation of DC pensions was a focus on value for money.
The FCA said: “We expect the proposed workplace pensions Value for Money framework and the Government’s wider Pension Schemes Bill to help drive positive change. We want firms to engage in the development of these changes and prepare to implement and embed them in a way that best supports savers.”
Other regulatory priorities for the pension market highlighted by the FCA included looking at how schemes can be more confident investing in private assets, and working with firms to embrace innovation. The regulator also promised to consider how it can better modernise its own regulatory framework to help firms support a better consumer journey.
The FCA is publishing a series of Regulatory Priorities publications to replace the previous 40 portfolio letters published annually. Each report sets out the regulator’s areas of focus by industry sector.
The full Pensions Report can be read on the FCA website.