The Financial Conduct Authority (FCA) is considering whether it should 'decouple' the ability to take tax-free cash from a pension from the decision about what to do with the remainder of a pension pot.
The suggestion was made in its Retirement Outcomes Review interim report, out on 12 July, in which the regulator expressed concerns mass market non-advised consumers were vulnerable in the drawdown market. The regulator said some consumers were moving out of accumulation products and into their own provider's drawdown product to access tax-free cash because their schemes did not have an encashment feature. It was concerned many did this without considering whether it was value for money, or suitable for their needs, and said a lack of shopping around could mean crumbling competition, ...
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