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FSCS to target pension provider disclosures in new guidelines

The Financial Services Compensation Scheme will publish guidelines to determine how life and pension product providers should communicate the protection offered by the lifeboat fund to their customers.

The FSCS is currently undertaking further promotion to raise awareness on consumers’ knowledge of pension protection.

New research undertaken by Ipsos Mori shows 68 per cent of consumers think protection for pensions is capped at £5,000.

Only 4 per cent of respondents were able to identify the level of protection available to them.

A FSCS working group launched 18 months ago is already in the process of establishing a set of best practice standards for protection disclosure.

This is now set to include the assessment of the communication customers receive from providers.

FSCS chief executive Mark Neale says: “We are working with leading firms in the life and pensions sector to ensure that the industry agrees a consistent approach to disclosing pension protection information.

FSCS chief calls for ‘significant’ rise in payouts

“[The working group] will shortly publish guidelines on how life and pension product providers inform consumers about FSCS.”

Close to a third of respondents to the lifeboat funds’ November research say they would have invested more in their pension if they had known it was fully protected by the FSCS.

The research also found only 26 per cent of consumers believe the lifeboat fund’s protection covers pension products generally.

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Comments

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  1. I’m confused. https://www.fscs.org.uk/what-we-cover/ states:-

    Annuity

    If you’re drawing a set retirement income from an annuity, even if it has a savings element, and the firm fails.
    •100% protected.

    Investment

    If your pension is held as an investment [which, surely, most are] you could claim for misleading investment advice, poor investment management or misrepresentation if you’ve lost money as a result and the firm that advised you has since failed.
    •£85,000 per eligible person, per firm.

    Am I missing something?

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