The Financial Conduct Authority’s (FCA) consultation CP25/39: Adapting our requirements for a changing pensions market has drawn sharply contrasting responses from UK pension providers, highlighting the challenges of regulating non-advised defined contribution (DC) transfers and consolidations.
Launched last December, the consultation set out a new framework for interactive digital pension planning tools and a standardised process to support non-advised consumers in making informed decisions on transferring or consolidating DC pensions.
The FCA aims to provide clearer, comparable information for members, helping reduce transfers driven by convenience rather than long-term outcomes.
Aegon UK has urged the FCA to defer the proposed major changes until 2030, warning that immediate implementation risks overwhelming consumers with data and inadvertently discouraging beneficial consolidation.
In its consultation response, Aegon highlighted the potential of existing “trace and consolidate” tools to simplify the process for members, and argued that applying the rules only to contract-based pensions while leaving trust-based schemes untouched would be “bizarre and very unhelpful”.
Steven Cameron, pensions director at Aegon, said delaying reforms would allow wider government consolidation initiatives and the rollout of pension dashboards to provide infrastructure supporting informed decisions.
In contrast, People’s Partnership, provider of People’s Pension, has called for the FCA reforms to apply across the whole DC market without delay. It warned that partial implementation could create a regulatory divide, leaving millions of savers in trust-based schemes with weaker protections.
Patrick Heath-Lay, chief executive officer of People’s Partnership, said meaningful reform requires alignment between the FCA and the Department for Work and Pensions, with rules coordinated alongside the forthcoming Pensions Schemes Bill.
The organisation also suggested banning incentives that may skew transfer decisions and emphasised that regulatory parity is key to simplifying the market and protecting all savers.
The divergent positions underline the tension between immediate consumer protection and the risk of over-complicating decisions for millions of pension holders. Aegon emphasises the benefits of deferral to integrate wider government consolidation efforts, while People’s Partnership stresses the urgency of market-wide reform to prevent uneven protections.
The FCA is now reviewing responses to CP25/39, which closed on 12 February, before deciding its next steps.
Providers, trustees and advisers will be closely watching whether the regulator opts for a phased approach aligned with government initiatives or moves quickly to implement uniform transfer and consolidation standards across the DC market.
