The FCA is probing pension firms on their communications around guaranteed income benefits, based on concerns consumers do not fully understand the benefits they are giving up.
In its latest regulatory update, the FCA says it will review how adequate pension firms’ customer communications are in non-advised sales as well as looking into what oversight firms carry out.
Since pension freedoms were brought in, the regulator says it has seen an increase in the number of customers giving up guaranteed income benefits.
The FCA says: “We are concerned that customers may not fully understand the nature and value of the guarantees they are giving up.
“We will also look into what communications firms have made to customers with guaranteed income benefits ahead of the proposed introduction of the secondary annuities market.”