The FCA’s planned reforms to non-advised pension transfers will add barriers to the process which could create extra friction and delays, according to AJ Bell.
CEO Michael Summersgill (pictured) warned the proposals are “anti-consumer” and “anti-competitive” and “represent the worst kind of regulatory intervention”.
The FCA put out a consultation before Christmas proposing that pension providers will have to share extra information with customers before allowing them to transfer, potentially adding around 13 working days to the transfer process.
“Without presenting any clear justification whatsoever, the FCA has set out plans to shut down consumer choice and put barriers in the way of people who do the right thing and engage with their retirement finances,” he said.
“This is all the more baffling given the regulator has spent years rightly focused on improving pension transfer times – including identifying slow transfers as a key harm it wanted to address as recently as 2023.”
To make matters worse, Summersgill added, the reforms will only apply to FCA-regulated schemes. Most workplace pension schemes – where many UK savers transfer from – are regulated by The Pensions Regulator, so will not have to adhere to the proposals.
“This means the proposed 10-day time limit for firms to provide the information needed to process a transfer will not apply to workplace pension schemes that don’t come under the FCA’s remit. Ironically, this is where some of the worst offenders when it comes to slow pension transfer times reside,” he said.
“The FCA needs to go back to the drawing board here and engage with firms on solutions that do not risk causing substantial consumer harm through delayed transfers.”
