The move follows the FCA’s sweeping changes to the DB transfer market today as the regulator banned most DB transfer contingent charging and announced plans to drive up transfer advice standards.
The FCA published its plans to reform the transfer advice market in PS20/6 which was published today.
The new consumer guide warns pension savers that a transfer is “unlikely” to be in their best long-term interests.
- tells savers they do not need to “rush” decisions about their pension and should get always advice first
- reminds DB pension holders that transferring to another type of arrangement is “unlikely” to be in their best long-term interests
- highlights the risks to savers of transferring out of a DB scheme
- tells them the steps they can take to make sure they make an “informed decision”
- explains what they should expect when they get financial advice on a DB transfer
- informs savers where they can get free, impartial guidance about their pensions from the Money and Pensions Service (MaPS) and The Pensions Advisory Service (part of MaPS)
Charles Counsell, chief executive of TPR, said: “Leaving a defined benefit (DB) pension is one of the most significant financial decisions savers can make and so our joint factsheet is a really important tool to alert them to what they may lose if they take this step. It also explains the key things to consider before seeking advice on a DB transfer.
“For most, switching from a DB scheme is unlikely to be in their best long-term interests. They may lose a guaranteed retirement income and pension protection if an employer goes bust.
“Savers should not rush their decision and should seek FCA-regulated advice first before making a move that can’t be reversed. People with a transfer value of over £30,000 must by law get advice before moving their money.”
The factsheet can be found at www.fca.org.uk/consumers/pension-transfer.