Anyone who accesses their pension for the first time will be directed to independent guidance from Pension Wise, the regulator has said. From 1 June 2022, the Financial Conduct Authority (FCA) will require pension providers to nudge savers to the government’s advice service as it said it was a “cause for concern” that only a small number of people had done so. The policy is referred to as the ‘stronger nudge’ under the Financial Guidance and Claims Act 2018. It will apply to providers of pensions, including operators of self‑invested personal pensions (SIPPs). Stakeholders with an interest in the pensions and retirement income sector will also have to comply. Using feedback from a consultation around this launched this year, the FCA now says that providers must refer consumers to Pension Wise, explain what the service does and offer to book an appointment or give them the information to book for themselves. Providers will also have to confirm or record whether the consumer has received advice or guidance, as well as any refusals. The FCA received 57 formal responses to its consultation and 437 email responses. Around half of the responses said the nudge to independent guidance currently came too late in a consumer’s pension journey. Others suggested that people who had previously received advice be exempt from the nudge to avoid confusion. The regulator said it believed all consumers should have access to advice from Pension Wise, even if they had received guidance before as it could still be beneficial. If a consumer refuses guidance under the condition they have received it already, providers should explain that they could benefit from additional guidance as circumstances may have changed.

Past performance is not a reliable guide to the future. The value of investments and the income from them can go down as well as up. The value of tax reliefs depend upon individual circumstances and tax rules may change. The FCA does not regulate tax advice. This newsletter is provided strictly for general consideration only and is based on our understanding of law and HM Revenue & Customs practice as of December 2021 and the contents of the Finance Bill. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.