2018年-FCA英国金融行为监管局_ms16_1_3_annex_1_8页_397kb

Retirement Outcomes Review - Annex 1 Summary

1. Scope of the Study

This annex outlines the scope and approach of the Retirement Outcomes Review (ROR), focusing on the provision of retirement income options in the UK by FCA-regulated providers. The review examines the following products and options under pension arrangements that allow access to Defined Contribution (DC) savings or conversion into retirement income:

• Annuities
• Flexi-access income drawdown
• Hybrid and blended products (combining features of drawdown and annuities)
• Uncrystallised Funds Pension Lump Sum (UFPLS) cash withdrawals
• Full cash withdrawals

The review does not include:

• Pension accumulation products (as competition effectiveness at this stage is out of scope)
• Other retirement savings products such as Individual Savings Accounts (ISAs) and equity release products
• Issues related to financial advice, including access, value, and quality

2. Our Approach

The ROR examined several key topics through a combination of data analysis, consumer research, stakeholder engagement, and international comparisons. These include:

• Shopping around and switching
• Non-advised consumer journeys
• Business models and barriers to entry
• Impact of regulation on retirement outcomes
• Investment decisions in drawdown
• Charges paid by consumers in drawdown

3. Evidence Gathered

A variety of data sources and research methods were used to support the review:

• Understanding non-advised consumer journeys
• Consumer decisions to fully withdraw DC pension savings
• Consumer engagement with drawdown investment decisions |
  | Provider data | Five main sources of data were used:
• FCA retirement income data (collected quarterly from a representative sample of providers)
• Bespoke data request on distribution channels and charges
• ABI data on member sales since pension freedoms
• Data on drawdown investment choices and charges
• Moneyfacts data to assess annuity rates |
  | Experimental testing | Testing of cost summary metrics to help consumers shop around for drawdown. |
  | Meetings with external stakeholders | Engaged with ten providers and others to understand market development and business model adjustments. |
  | International comparisons | Conducted interviews with regulators and government bodies from Canada, Denmark, Ireland, New Zealand, and the US. Also worked closely with Australia to incorporate their experience into potential remedies. |

4. Interim Report Summary

Interim Findings

• Pension freedoms have been well-received by consumers, with over 1.5 million DC pension pots accessed between April 2015 and September 2017.
• Key issues identified:
  • Most consumers accessed their pension pots before the age of 65, with 70% of pots accessed early.
  • 55% of accessed pots were fully withdrawn, with 64% of these pots valued under £30k.
  • 90% of fully withdrawn pots were under £30k.
  • 94% of those who fully withdrew had additional income sources (e.g., state pension).
  • Many consumers fully withdrew due to mistrust in pensions, influenced by scandals, perceptions of stagnation, and changing rules.
  • Non-advised consumers often take the path of least resistance, accessing drawdown from their current provider without comparing options.
  • Non-advised consumers are more likely to focus on tax-free cash and neglect the rest of their pot.
  • The proportion of non-advised consumers entering into drawdown increased from 5% pre-reforms to 30%.
  • Drawdown is now more popular than annuities, with 30% of pots in drawdown vs. 12% in annuities (pre-reforms: 90% in annuities vs. 5% in drawdown).
  • Only seven providers currently offer annuities in the open market.
  • Limited innovation for mass market consumers, though the market is still developing.

Potential Remedies Considered

• Default or off-the-shelf investment pathways to assist non-advised consumers in making informed decisions.
• Charge control measures for default products to ensure value for money.
• Extending oversight by Independent Governance Committees (IGCs) to cover drawdown products.
• Decoupling – allowing consumers to take 25% tax-free cash early while deferring the rest of the decision.
• Drawdown comparison tools and summary cost metrics to improve consumer choice.
• Improved communication (e.g., wake-up packs, risk warnings) and free guidance services (e.g., Pension Wise) to support informed decision-making.
• Increased awareness of enhanced annuities.

5. Consultation Process

• The FCA sought feedback on interim findings through stakeholder events, including roundtable discussions with industry and consumer groups.
• 56 formal written responses were received from a wide range of stakeholders, including providers, consumer bodies, trade associations, individuals, and academics.
• A summary of stakeholder views and early thinking on remedies is provided in annex 3 of the interim report.