- FCA plans to create friction in non-advised pension transfers are ‘anti-consumer and anti-competitive', AJ Bell chief executive Michael Summersgill warns
- Under the proposals, firms receiving pension transfer requests will be required to gather information from the person’s old scheme and present it to them before initiating the transfer, unless they opt-out
- The reforms risk significantly delaying transfers between FCA-regulated pension schemes and will not apply to workplace pension schemes, making them completely unworkable in their current form
- The intervention has been proposed without any clear justification and will undermine years of progress on improving pension transfer times
- Regulator urged to go back to the drawing board and focus on improving engagement with annual benefit statements – including exploring the role the Pensions Dashboard could play
- FCA ‘remain open to alternative proposals’ according to reports (Source: Sky)
- The FCA’s Consultation Paper 25/39: Adapting our requirements for a changing pensions market, closed on Thursday 12 February 2026
Michael Summersgill, CEO of AJ Bell, comments:
“These proposals are anti-consumer, anti-competitive and represent the worst kind of regulatory intervention. Without presenting any clear justification whatsoever, the FCA has set out plans to shut down consumer choice and put barriers in the way of people who do the right thing and engage with their retirement finances. This is all the more baffling given the regulator has spent years rightly focused on improving pension transfer times – including identifying slow transfers as a key harm it wanted to address as recently as 2023*.
“To make matters worse, these proposals will only apply to pensions regulated by the FCA, meaning the proposed 10-day time limit for firms to provide the information needed to process a transfer will not apply to workplace pension schemes that don’t come under the FCA’s remit. Ironically, this is where some of the worst offenders when it comes to slow pension transfer times reside.
“This is a classic case of a solution looking for a problem that simply does not exist. There are vanishingly few policies that contain guaranteed benefits that could be lost during a transfer and pension finding services often used by people consolidating retirement pots usually flag these to customers anyway. Costs and charges in modern SIPPs are extremely competitive, with AJ Bell’s Ready-made Pension – a product specifically aimed at people looking to combine their pensions – charging 0.45% all-in annually, comfortably below the 0.75% automatic enrolment charge cap. What’s more, when it comes to investment choice, service and flexibility, platforms are often superior when compared to workplace pension schemes.
“The contrast between this ill-thought-out intervention and the measured, collaborative, evidence-based approach taken by the regulator to Targeted Support reforms is glaring. The FCA needs to go back to the drawing board here and engage with firms on solutions that do not risk causing substantial consumer harm through delayed transfers. Annual benefit statements are the natural solution, with the anticipated launch of the Pensions Dashboard providing an obvious platform to allow people to compare information on their different pensions.”
*Source: Our platforms supervision strategy: portfolio letter
What are the FCA’s proposals on transfers?
The FCA wants to support non-advised consumers who are considering pension transfers or consolidating defined contribution pensions, by making sure they have information to make informed decisions. It is concerned these consumers are unknowingly giving up valuable benefits, for example guaranteed investment returns, loyalty bonuses, or protected pension ages, or transferring to schemes offering fewer decumulation options or incurring higher charges.
Under the proposals, consumers transferring pensions will be asked if they want a comparison between their current and new schemes. Unless they opt out, they must consent for the new scheme to request information from their existing one. The existing scheme has ten days to provide the details, and the new scheme must deliver the comparison to the consumer within three days.
These proposals could therefore add a lengthy delay to pension transfers. However, very few pensions include the benefits and guarantees that the FCA are worried consumers will lose.
Proposals would not apply to the whole pension market
These proposals would only apply to FCA-regulated schemes, so exclude master trusts and other occupational pension schemes. These types of pension schemes could choose to give the information to any FCA-regulated scheme requesting it – for example a SIPP – or they could simply ignore the request altogether.
Are there alternative solutions?
AJ Bell believes the FCA, Department for Work and Pensions (DWP) and The Pensions Regulator (TPR) should work together on developing alternative solutions to ensure pension savers with valuable guarantees and protections fully understand their benefits and the risks of losing them through transfers. This could include regular communication, such as including this in the annual benefit statement, or in the longer term as part of the information held on Pensions Dashboards.