The Financial Conduct Authority (FCA) has proposed new rules to require defined contribution pension providers to offer to book Pension Wise appointments for members before they access their pension savings.
Under the new rules providers would need to ‘nudge’ members to Pension Wise for guidance before they can enter drawdown and offer to book an appointment with the service for them.
Currently providers are required to signpost scheme members to Pension Wise guidance and encourage them to use the service or take independent financial advice.
The regulator said the new proposals would mean savers “will be given a further opportunity to take Pension Wise guidance, including making the appointment arrangements for them, before they access their pension. This will make it easy for consumers to book an appointment while they are already engaged in a conversation about their pension. The proposals would implement a requirement set by Parliament to encourage consumers to take Pension Wise guidance.”
The regulator is proposing that when a scheme member has decided they want to access their pension savings, a provider must refer them to Pension Wise guidance, explain the nature and purpose of Pension Wise guidance, and offer to book and appointment with the service.
Under the new rules, providers would also be required to confirm and record whether the scheme member chose to opt out of guidance, receive Pension Wise guidance, or received regulated advice.
The FCA has released the full details of its proposals in a consultation paper, and has invited firms to share additional ideas on how to increase the take-up of Pension Wide beyond this nudge.