The UK’s Financial Conduct Authority (FCA) is set to overhaul the £1.6tn workplace pension sector, aiming to improve competition and transparency. The measures include a cap on early exit fees and a requirement for pension providers to offer a range of investment options. The FCA’s proposal also encourages employers to consider multiple pension providers, rather than defaulting to a single provider.
The regulator’s move comes in response to a government review, which found that many savers are not getting value for money from their pensions. The review also highlighted the lack of competition and transparency in the sector, which can lead to higher costs and lower returns for savers.
The FCA’s proposal has been welcomed by consumer groups, who believe that the measures will help savers get a better deal. However, some industry insiders warn that the proposed changes could lead to a rise in pension scams, as fraudsters may exploit the increased choice and flexibility.
The FCA is now consulting on the proposed measures, with a final decision expected in the first half of 2023. If approved, the changes could significantly impact the UK’s pension landscape, potentially benefiting millions of savers.
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