Pension providers will soon have to begin submitting two new sections in their regulatory return to help the FCA monitor evolving risks in the retirement income market.
Last year, the regulator set out plans to tighten up its data monitoring in the pensions space to stay on top of potential areas of consumer harm in an increasingly fragmented retirement space.
While the regulator had made ad hoc requests to providers, it decided to replace these with two regular additional sections to the Gabriel return, helping it to look at trends on firms’ market shares, product sales growth, and data on metrics such as consumer switching.
In a technical note yesterday, the FCA has confirmed that the two new sections, one on “retirement income flow data”, to be completed every six months, and the other on “retirement income stock data”, to be completed annually, will apply to firms with reporting periods ending on or after 30 September 2018, and will cover data from this April.
The flow data includes the number of transfers between providers, the value of assets from plans entering drawdown, how different distribution channels are used, and the use of advice and Pension Wise.
The stock data includes withdrawal values, the annual rate of withdrawal by pot size and age bands, and the use of advice for withdrawals.
The FCA previously estimated that it the total cost across providers to set up the reporting would be between £600,000 and £1.2m, with ongoing costs of between £500,000 and £900,000 a year thereafter.