The Financial Conduct Authority (FCA) is "very, very confident" that the targeted support proposals will come into effect by the "end of the year or early next year", FCA head of asset management and pensions policy, Nike Trost, has said.

Speaking in a joint podcast with The Pensions Regulator (TPR), Trost said that the consultation on targeted support, which is approaching its close, is especially relevant for trustees, as if this new service goes live, it will “really change” what’s available to scheme members in the market.

Trost argued that the timing of this is "not a day too soon", given the growing number of members entering retirement with defined contribution (DC) pots as their primary source of income.

Adding to this, TPR interim director of pensions reform, Patrick Coyne, highlighted government data showing over 14 million people are under-saving and warned that millions could be “drifting toward an uncertain retirement,” stressing the system must deliver real value while guiding people into the retirement pathway right for them.

With the consultation closing soon, both Trost and Coyne urged trustees to respond to the targeted support proposals.

In particular, Coyne said that with targeted support becoming a new kind of regulated activity, trustees should respond to the consultation with examples of the support they wish to provide within the existing framework, especially ready-made in-scheme benefits, to find out if this could be delivered themselves or with an FCA-authorised partner.

“We know trustees want to support members, but uncertainty around the advice boundary is a real barrier. Now’s the time to share examples and help shape future rules,” Coyne said.

During the podcast, Coyne and Trost explained that the targeted support proposals and the Pension Schemes Bill’s plans for guided retirement solutions are complementary initiatives aimed at improving outcomes for scheme members.

They urged pension professionals to take “proactive steps” on guided retirement, including developing a deeper understanding of members’ varied profiles, which they said is critical in helping savers make informed decisions as they approach retirement.

Coyne and Trost emphasised that trustees must grasp the diverse needs of their members and use key data, such as age, pension pot size, and proximity to retirement, to deliver tailored communications, targeted nudges, and appropriate decumulation solutions.

Building on this, they called on the industry to innovate in the design and delivery of retirement income solutions, ensuring these are tailored to different saver types.

Coyne explained that people don’t save into pensions just to accumulate a pot - they want sustainable retirement income, and with these reforms and the revived Pensions Commission, there is “a real chance to make that happen”.

He warned that generic, one-size-fits-all solutions, such as basic signposting to off-the-shelf drawdown products, “probably, probably won't cut it.”

Coyne urged trustees to consider multiple default options tailored to different member cohorts and provide flexible choices.

While he doesn’t have specific cohort defaults in mind, he emphasised the importance of understanding members’ needs and said, “that's going to be a really big focus for us [TPR] via our supervision and policy over the next few months and years”.

Trost added that the availability of more support for consumers throughout their savings journey and at the point of retirement has to be a “success we aim for.”

“It’s about consumers being offered really good product choices to choose from in a really simple way,” she said.

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