The FCA has highlighted the emerging problems stemming from pension freedoms with many savers abandoning their pension, record numbers moving into non-advised drawdown and an overall lack of product innovation.
In its retirement outcomes review, published today, the regulator says while the pensions market since the reforms is still evolving, there are issues building up that may warrant FCA intervention.
It found over half of the fully withdrawn pension pots were not spent but transferred into other savings or investments. The FCA attributes this in part to a general mistrust of pensions, but says this could lead to consumers paying too much tax or missing out on investment growth.
“Ensuring this market works well will require cooperation across Government, regulators, the industry and consumer bodies.
“We will work closely with stakeholders to make sure we are clear on the actions we are best placed to lead.”