Regulation  

FCA defends decision to shun pension rules of thumb

FCA defends decision to shun pension rules of thumb

The regulator's head of pension policy has denied failing savers trying to navigate pension freedoms by coming up with rules for best outcomes.

Speaking to FTAdviser after a panel debate at the Association of British Insurers’ Long Term Savings conference yesterday (4 July), Maggie Craig defended the regulator’s decision not to provide simple rules that would allow advisers to offer guidance to help savers achieve better outcomes.

“What we have come up with is some rules and some guidance,” she said. “If you started coming up with rules of thumb, you are starting to do an advisers’ job. 

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“Is an adviser really going to work with rules of thumb? I don’t know many who are going to advise on rules of thumb.”

Her comments came after advisers expressed frustration at the regulator’s failure to provide universal rules of thumb to allow advisers to assist people to achieve a better outcome than if they tried to navigate pension freedoms alone.

The lack of such rules means advisers have to offer full advice or guidance, with no middle ground in which to operate.

At an earlier debate, Tom McPhail, head of retirement policy at Hargreaves Lansdown, said: “Unless we give everyone personalised recommendations [advising] doesn’t stack up.

“But we can’t give them the kind of guidance [listing universal rules] that we would want to. We are still hamstrung at a regulatory level from giving people the information they need.”

Richard Parkin, head of pensions policy at Fidelity International, added: “Retirement is very different for people and expecting to have a single rule of thumb is difficult.

“Having a rule of thumb though could help people though, such as if you retire and take income later you will have more income.”

simon.allin@ft.com