PIMFA
Pensions
For most people, their pension represents the largest source of wealth that they will accumulate over their lives. In accumulation and decumulation the wealth management, financial advice and planning industry provides a reassuringly regulated and professional service that puts the customer at the heart of everything they do.
This has become increasingly complex for firms over the preceding decade as they have sought to navigate a changing regulatory environment. Despite substantive reforms such as the introduction of automatic enrolment, pension freedoms, changes to pension transfer advice and more, pensions continue to be a subject of reform from Regulators and the Government. Over the coming years we believe that we see more consolidation of pension schemes, further drive towards value for money, and a drive to focus the way in which and where these schemes invest. Where these reforms directly impact PIMFA firms, we will engage on your behalf to secure change in your interests.
- FCA Retirement Income Market Data 2023/24
The FCA has published retirement income market data for 2023-2024, with key findings set out:
- Total number of pension plans accessed for the first time in 2023/24 increased by 19.7% to 885,455 compared to 2022/23 (739,652).
- Sales of annuities saw the biggest increase from 59,163 in 2022/23 to 82,061 in 2023/24 (38.7%).
- Sales of drawdown increased by 27.9% from 218,183 in 2022/23 to 278,977 in 2023/24.
- The overall value of money being withdrawn from pension pots increased to £52,152m in 2023/24 from £43,233m in 2022/23. This is an increase of 20.6%.
- Some 30.9% of pension plans accessed for the first time in 2023/24 were accessed by plan holders who took regulated advice (down from 32.9 % in 2022/23).
- The number of DB to DC transfers continued to fall from 18,080 in 2022/23 to 7,181 in 2023/24.
Access the publication here.
- Our Latest work
FCA DP24/3: Pensions: Adapting our requirements for a changing market
PIMFA Responds to FCA DP24/3: Pensions: Adapting our requirements for a changing market
Read the response here
This guide provides a review of the FCA policy statement on pension transfer advice.
Latest News
FCA: Retirement income advice: good practice and areas for improvement
The FCA have published an article providing examples of good practice and potential areas for improvement for firms providing retirement income advice.
They set out three areas seen as fundamental to the provision of good outcomes for clients in decumulation:
- The quality of firms’ information collection and record-keeping
- The appropriateness of client risk profiling
- The sustainability of clients’ income withdrawals
Good practice examples and areas of improvement cover:
- Information collection and record keeping by firms (5.1)
- Risk profiling (5.2)
- Managing sustainability of income withdrawals (5.3)
Next steps
The Regulator:
- Advises that all firms involved have been given individual feedback with the regulator seeking corrective actions including the provision of potential redress where appropriate
- Encourages all firms providing RIA to clients in, or nearing, decumulation to read this article in conjunction with the Review and the FCA article on cash flow modelling and take any relevant action
- Intend to issue further ‘bite-sized’ articles on other key issues impacting the financial advice and wealth management sectors (to be shared at interactive events across the UK)
Read the article here
