Industry bodies have called for a coordinated, whole-of-market approach to the Financial Conduct Authority’s (FCA) proposed pension transfer reforms, warning that the measures risk falling short unless aligned across the defined contribution (DC) landscape.

Responding to the FCA’s consultation, CP25/39, Pensions UK noted that many of the proposals reflected long-standing industry concerns and represented a step towards improving consumer outcomes.

However, it cautioned that significant operational and regulatory challenges remained, which could undermine their effectiveness without clearer alignment across the system.

A key concern highlighted by the trade body was that a significant proportion of transfers took place from trust-based occupational DC schemes to FCA-regulated products, including SIPPs.

Limiting the reforms to FCA-regulated arrangements, it argued, would fail to address areas of greatest consumer risk.

Pensions UK therefore urged the Department for Work and Pensions (DWP) and The Pensions Regulator (TPR) to develop parallel proposals to ensure consistency, reduce complexity, and provide equitable protections for savers across both trust-based and contract-based schemes.

Echoing this, People’s Partnership said the FCA’s direction of travel was welcome but cautioned that applying reforms solely to contract-based schemes could create a two-tier system.

The provider of The People’s Pension argued that meaningful reform would require close coordination between the FCA and the DWP, particularly in light of the forthcoming Pension Schemes Bill.

Meanwhile, Pensions UK also called for an explicit, industry-wide ban on cash and other transfer incentives, citing behavioural research which showed strong consumer bias toward upfront rewards, even when transfers may reduce long-term pension value.

It warned that relying solely on Consumer Duty obligations would not sufficiently protect savers unless accompanied by robust enforcement.

In addition, the trade body raised concerns that, as drafted, the reforms could create fragmented consumer journeys - for example, where comparison tools prompted transfer decisions before scam prevention checks or stronger nudge requirements are triggered.

Clear sequencing and regulatory alignment, it argued, would be essential to avoid confusion and disengagement.

Pensions UK also highlighted overlaps with wider reforms, including the value for money (VfM) framework, small pots consolidation and pensions dashboards.

Without coordination, it stressed, providers could face duplicated effort, inconsistent messaging and additional costs, potentially undermining the push to consolidate small pots.

While supporting clearer comparison information, Pensions UK cautioned that focusing primarily on charges and investment performance risked obscuring the broader value of workplace schemes, including employer contribution structures, employer-borne costs, in-scheme guidance, and integrated retirement support.

It therefore called for clearer guidance to help trustees communicate scheme value without straying into regulated advice.

Pensions UK head of DC, Philip Brown, said savers must be properly supported as retirement decisions become increasingly complex.

He described the consultation as a strong first step, but stressed that regulators must work together to deliver a coherent, whole-of-market framework.

Without alignment, he warned, savers would continue to face uneven protections and a fragmented experience at a time when clarity and confidence are critical.

People’s Partnership chief executive officer, Patrick Heath-Lay, described the proposals as “a significant step in the right direction” but indicated that most savers did not distinguish between contract-based and trust-based arrangements and therefore expected consistent protections.

He suggested that fragmented regulation would add unnecessary complexity and costs to schemes and potentially expose members to avoidable risks.

Heath-Lay also signalled support for further strengthening the framework, including an outright ban on transfer incentives.

The consultation on the FCA's proposed reforms closes on 12 February.

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