The Financial Conduct Authority (FCA) is consulting on plans to require pension providers to give decumulation customers annual information on all the charges they have paid on their pension pot.
Under the FCA’s plans, providers of personal and stakeholder pension schemes will be required to provide decumulation customers with annual information on all their costs and charges they have paid on their pension. These will include transaction costs and would have to be expressed in pounds and pence.
Additionally, pension providers will be required to clarify if any adviser charges have been paid out of the pension. Where there is no known adviser remuneration, the FCA will require firms to state that adviser remuneration is not included in the charges figure provided.
The FCA said the proposals were intended to aid transparency and help consumers understand the charges they are paying so they can make more informed decisions post-sale.
The regulator added: “By increasing consumer awareness of the actual charges applied, consumers will be more likely to shop around, and so firms in the decumulation pension market will be incentivised to be more competitive.”
The FCA is considering responses to its latest consultation until 5 April 2019.