Pension protection rules outlined by the FCA

New rules have been revealed this morning to protect consumers as the pension reforms take effect. The Financial Conduct Authority said firms involved in the sale of retirement income products would be required to give additional warnings tailored to customers.In January, the FCA announced it would tell firms to provide consumers with "risk warnings" based on an individual's circumstances so that they can make an informed decision on their pension based on the benefits and risks involved.{desktop}{/desktop}{mobile}{/mobile}Explaining the new rules in a statement, the FCA said: "Firms are already required to provide risk warnings. However, these changes will require them to personalise those warnings to the individual and the choice they are making by asking a series of questions and actively engaging with the customer."The FCA's rules achieve a fair balance between protecting consumers and addressing valid concerns from firms about their ability to comply from 6 April."The new personalised "risk warnings" must now be given to customers when they contact a firm to access their pension savings."The information will support the guidance by the Government's Pension Wise service."One of the key purposes is to encourage people who have chosen not to seek regulated advice, to consider their options carefully before making an irreversible decision."Firms will need to keep records to show that consumers have received relevant warnings and whether they have taken regulated advice or guidance from Pension Wise.The FCA is introducing the rules without consultation. However, the regulator has confirmed that it will undertake a review of 'at-retirement' rules in the summer of 2015 and will consult at that time on whether any changes need to be made to the rules published today.Christopher Woolard, director of strategy and competition at the FCA said: "The pension reforms give those people who are nearing retirement greater choice on what to do with their pension pots. We want to ensure that they get the right information so that they can make informed decisions about their future."The FCA said firms should consider a number of issues when designing appropriate risk warnings, for example:· the state of a consumer's health· tax implications· the impact on means-tested benefits, and;· investment scams

Pension protection rules outlined by the FCA

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