The Financial Conduct Authority (FCA) has today published the terms of reference for a review of how competition is developing in the retirement income market.
The Retirement Outcomes Review (ROR) is a post-pensions freedoms follow-up to the issues identified in the Retirement Income Market Study (RIMS), published in March 2015. It will examine the ease of shopping around and switching in the at-retirement sector, non-advised consumer journeys, business models and barriers to entry, and the impact of regulation on outcomes.
The RIMS found that most firms are meeting the FCA’s requirements on signposting Pension Wise although found a number of areas where improvements could be made. The FCA says it is also encouraged to see some firms taking active steps to raise awareness of pension scams among their customers which other firms could consider adopting.
FCA director of strategy and competition Christopher Woolard says: “In our 2016/17 Business Plan, we committed to looking across the pensions sector to ensure our policies support the fair treatment of customers and encourage competition. Deciding how to use pension savings is one of the most important decisions people will make.
“For a competitive and innovative market, it’s crucial that the market develops in a way that allows consumers to engage with their options, shop around, and switch providers where appropriate. We also want firms to compete hard for business, offering good outcomes for consumers through lower prices, products and services that meet customer needs, better customer service and wider choice.
“Since the introduction of the pension reforms there have been a number of key market developments. We want to assess how competition is developing in the retirement income market by investigating how firms and consumers have responded to the new freedoms.”