The Financial Conduct Authority's Christopher Woolard outlines the two key areas within pensions the watchdog will focus on over the coming year.
Our aim is to add public value by improving how financial markets operate to benefit individuals, businesses and the UK economy. The pension sector continues to be a significant area of work for us, so I wanted to give you an overview of where we will be focusing over the next 12 months.
In the coming year we will continue exploring whether competition works effectively
Pensions is a key priority
The changing landscape and challenges for people saving for retirement mean that we will continue to be active in this sector, working closely with other regulators and government.
Increasing competition
In the coming year we will continue exploring whether competition works effectively in two areas of the sector – the retirement income market and the experience of people saving into non-workplace pensions.
In the wake of the pension freedoms, our Retirement Outcomes Review considers how consumers make choices to use the freedoms to access their pension savings without the support of an adviser; in particular, whether consumers can compare and choose between the wider range of products and options now available to them and how firms have changed their business models.
The interim report, due to be published in the summer, will provide an opportunity to comment on our emerging findings on how the market is working and, if necessary, potential remedies to help improve competition to benefit consumers.
For good reason, with automatic enrolment the focus has been on workplace pensions, but pension provision outside the workplace is also crucially important. Therefore we are planning to consider whether competition in the market for people saving into pensions outside of the workplace is working effectively, and in the interests of consumers.
Protecting consumers from pension scams
We will also look to protect consumers and their hard-earned savings from pension scams, as fraudsters continue to target consumers in an increasingly complex pension landscape.
The role of advice in a digital world
Long-term saving is one of the biggest issues facing society today. People are living longer and the pensions landscape seems to be constantly changing, which makes it very difficult to navigate and to know what options work best for individuals.
Our ScamSmart campaign aims to equip over-55s with the knowledge and tools to prevent them falling victim to investment fraud, including pension scams. Since the campaign first launched in 2014, we have used advertising, press activity and communications through partners to build awareness of the risks of investment fraud.
The campaign also promotes the Warning List, an online tool that helps people find out more about the risks associated with an investment, and check a list of firms the FCA knows are operating without authorisation. We hope to educate people on the warning signs of a scam and enable pensioners to identify tricks scammers are known to exploit.
Overall, the importance of the pensions sector is clear. Pension savers need to be protected from scams, and competition in the pensions industry needs to work well. These priorities will inform our work in the coming year.
Christopher Woolard is the executive director of strategy and competition at the FCA
© Financial Conduct Authority
