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FCA sets out data rules for post-pension freedoms world

Providers will have to submit data on pension transfers, the rate of withdrawal from drawdown, number of annuities sold and use of advice and Pension Wise

The FCA has set out how it will collect retirement income data in future to ensure it monitors the post-pension freedoms market effectively.

Since pension freedoms the regulator has collected retirement income data from a sample of pension providers on an “ad hoc” basis.

In a consultation paper last November, the FCA proposed introducing two new regulatory returns to get a better picture of the market.

It has today followed up with a policy statement confirming its intention to regularly collect data from the whole market to ensure supervision remains effective.

The FCA says: “The new regulatory returns will give us a better picture of the market, as our analysis will not rely on data from only a sample of firms. They will also provide firms with greater clarity on what data they need to provide and certainty regarding when and how often the data is required.”

One return, showing retirement income flow data, is to be completed every six months and the other, showing retirement income stock data, is to be completed annually.

Through the returns providers will report on a range of data including the number of pension transfers, the rate of withdrawal from income drawdown plans, the number of annuities sold and the use of advice and Pension Wise.

The FCA has decided to increase the time period providers have to file their returns from 30 business days to 45 business days.

Other changes include improving guidance notes to help firms complete the new returns and submitting the data through Gabriel.

Reporting starts from 1 April 2018 and the first submission is due within 45 days from 30 September.

Hargreaves Lansdown senior pension analyst Nathan Long says: “These rules could help, but data must not dominate and regulators should still take time to speak to people.

“Retirement is very personal and everyone has their own unique set of work, family, financial and health circumstances which drive the decisions they make. The numbers only tell a small part of the story.”

He adds: “The rules require firms to report back around the end of the tax year period, traditionally a time when clients are busy planning their finances.

“Forcing firms to report at this point risks dragging resources away from where they are needed most, helping people with their pensions.”

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  1. Mean, median or mode. What does the recorded data aim to clarify?

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