The Financial Conduct Authority (FCA) has said it is concerned providers' projections of what pension savers can expect to receive in retirement if they buy certain products are too high, and it wants to standardise the process.
In a wide-reaching consultation paper, the regulator said life companies are currently creating inconsistency for consumers, and firms using higher projections may be able to gain an unfair competitive advantage over their competitors. Firms are required to undertake projections of future benefits for life and pension products that reflect the investment potential of the product, subject to maximum rates, which are set by the FCA. Three rates can be given, a maximum intermediate projection flanked by an upper and a lower bound. The differential for the upper and lower bounds is fix...
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