The UK’s financial services and pension sector regulators have pledged to “deepen” their relationship, as they launched a joint strategy to manage risks and focus on key areas of the rapidly growing UK pensions market.
Addressing delegates at the Pensions and Lifetime Savings Association conference in Liverpool this morning, Lesley Titcomb, chief executive of the Pensions Regulator (TPR), said the supervisors have had to react to a changing pensions landscape.
“Millions more people are saving, which is a great thing. We as regulators have had to adapt,” she explained.
The new strategy – ‘Regulating the pensions and retirement income sector’ – will see TPR and the Financial Conduct Authority (FCA) focus on four key areas. It aims to assist those struggling to maximise pensions savings, prevent investments being badly managed, prevent pension funds being poorly managed, and assist people to make better financial decisions.
David Geale, director of policy for the FCA, joined Titcomb on stage in Liverpool to explain the strategy was a response to “a huge amount of change” in the UK pensions market.
“We felt it was important to take a step back and look at where our focus should be,” he said. “It is important that we adopt a more integrated approach and focus on joint objectives.”
Geale said closer attention would be paid to customers’ access to and participation in products that support later life living. The regulators would spend more time ensuring that funds were well-funded and “invested appropriately”.
The FCA director said that the regulators would also be looking at the governance and administration of schemes and levels of consumer understanding.
TPR recently adopted a new approach to regulation, Titcomb told delegates.
“We are redesigning our regulatory model, and the day-to-day approach to regulation,” she said. “The most public example is introducing one-to-one supervision for the highest risk schemes.”
Titcomb said that the regulator was keen to underscore its commitment to being clearer, and acting more quickly, in addition to its well-documented intention to become tougher.
She also outlined further detail on the regulator’s “high volume regulatory approach,” designed to enable the watchdog to keep on top of its responsibilities in a growing market.
She said: “What we will be doing is identifying emerging risks and tackling that with a group of schemes to see how they respond. Only then will we be using escalating interventions for the ones that don’t respond, or are unable to demonstrate they are dealing with things.”
In August, the two regulators launched a joint campaign to raise awareness of pension scams, after both TPR and the FCA were criticised for their response to issues with the restructuring of the British Steel Pension Scheme.