Providers required to implement Pension Wise stronger nudge from June 2022

Pension providers will be required to implement a 'stronger nudge' to Pension Wise guidance from 1 June 2022 under new rules from the Financial Conduct Authority (FCA), published today (1 December).

The changes aim to make it easier for consumers to book a free Pension Wise appointment, with providers required to refer customers to, and explain the nature and purpose of, Pension Wise guidance.

Providers will also be required to offer to book a Pension Wise guidance appointment in most cases, or provide customers with information to help people who want to book their own appointment.

The rules will apply to providers of personal and stakeholder pension schemes, including operators of self-invested personal pensions.

The FCA confirmed that it worked closely with the Department for Work and Pensions (DWP) in finalising the rules, with the DWP currently working on corresponding regulations for occupational pension schemes,

In addition to the stronger nudge, the FCA’s next phase of work, expected to start in early 2022, will look at additional ways to support consumers, considering the pension guidance needs of consumers more holistically at different points in their pensions journey.

This work will also link to the joint call for input on the pensions consumer journey undertaken with The Pensions Regulator (TPR), with the FCA confirming that it will consider the feedback received from joint call for input, alongside discussion point feedback from the consultation on the stronger nudge, to weigh up different options available.

“To ensure we only take forward the most cost effective, evidence based interventions, in an environment of limited resources, we will work closely with the DWP, TPR, Money and Pension Service, industry and other stakeholders to decide which of the different approaches to take forward,” it stated.

“If we decide to implement any such additional measures, we will consult on proposals at a later stage.”

The FCA has previously argued that the focus on guidance should not be isolated to the point of accessing a pension, also echoing recent views shared by the DWP that different approaches are needed at different life stages.

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