FCA’s fundamental concern over pensions


I haven’t got the time to do justice to the FCA’s latest review – indeed I had trouble  finding it – thanks to Sahil Sethi for sending me this link!

When in doubt – get Jo out!

“In Cumbo we trust” and for those not following her on twitter, here is her summary (with a few expostulations from me)

This is of course an important document, the FCA should be thought leaders- helping to set the debate on how things are and should be changing.

Eye on the ball, what is happening is a shift from a pensions culture to a savings culture, people are being nudged into saving with no idea of the consequences. As one senior NEST employee told a DG conference on Wednesday, people saving into the Government pension scheme expect a Government pension. Eye on the ball!

We grossly over estimate the value of our workplace savings and underestimate the power of the state. Especially for lower-earners, the rises in the single state pension are of more value than contributions into workplace pensions,

This “pensions triage is nothing more than window dressing. Preparing people for a decision they have yet to make is second guessing, we need a default position for those wishing to get their money back which doesn’t involve cashing pensions out, buying annuities or entering into unadvised drawdown.

Whatever the numbers, the key finding from the FCA is that more than half of these transfers shouldn’t have happened, the FCA has the remedy at hand to control the flow so that only those paying up front for advice get the opportunity to swap pension for a cash equivalent.

The consequences of moving from a pensions to a savings culture will be felt for generations ahead, the amount of money purchasing pensions seems to be falling.

The FCA should be asking themselves how much of the £36.8bn that came out of DB in 2017 found its way into workplace pensions and why the vast majority transferred to non-workplace products. It’s not just an advisory issue, workplace pensions aren’t generally seen as suitable – why not

You have to admire the FCA’s tact!

Jo goes on to note omissions.

and the continued ducking of the issue of hidden charges in (principally in actively managed workplace pensions).


To which I would add “no mention of the policy initiatives flagged as featuring in the white paper – the pensions dashboard and collective defined contribution pensions.

The changing pension landscape depends on good regulation. We have a regulator – in the FCA – that shows confidence but an occasional lack of agility.

By your fruits, will ye be judged, let’s hope that 2019 is a year when we start thinking about pensions as a wage in retirement and not a sub-set of wealth management

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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