The Institute and Faculty of Actuaries (IFoA) has launched a campaign to investigate the rising transfer of risk from institutions to consumers when planning their finances.

Its campaign – The Great Risk Transfer – will explore the extent to which risk that was previously shouldered by institutions is now falling on savers, such as the switch from defined benefit to defined contribution pension schemes.

The IFoA stated that although the shift allows savers greater freedom in managing their futures, the financial decisions can be too complex for many.

“Across the financial services sector, we are seeing risk being shifted away from institutions and towards the individual,” said IFoA president, John Taylor.

“There are many examples of this, but perhaps the most high-profile has been the gradual move by employers to offer DC pensions instead of DB pensions.

“This means individuals are taking on responsibility for making sure they have saved enough for their retirement, and for ensuring their pension lasts a lifetime.

“They are also taking on all the risks associated with investing, namely that their pension savings could increase in value or decrease in value depending on market performance.”

It wants to seek assurances that the transfer of risk is in consumers’ best interest and whether savers are equipped and supported enough to manage the risk.

Money and Pensions Service head of pension policy and strategy, Carolyn Jones, added: “We welcome this campaign and the debate it seeks to create.

“Understanding how we can continue to support people in managing increasing financial responsibilities is key to our goal of everyone making the most of their money and pensions.

“Financial wellbeing is about people feeling secure and in control, knowing that they are on track for a healthy financial future. We want to see 5 million more people understanding enough to plan for and during later life.”

The IFoA’s campaign is to gather evidence, convene debates, then engage with policymakers about how consumers can be supported to make informed decisions and which risks should be managed by institutions, such as employers, the state and financial services providers.

It is calling for evidence from 31 January until 30 April.

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