‘More could have been done’ to protect savers at launch of pension freedoms

“More could have been done” to protect people from the risks introduced by pension freedoms when they were launched in 2015, Financial Conduct Authority (FCA) chair, Charles Randell, has said.

Speaking at the Centre for Commercial Law Studies at Queen Mary University of London, Randell spoke about the importance of partnerships between the FCA, the government and other regulators.

While Randell stated that he had seen some “very effective” partnerships between the FCA and the government, he noted that he had seen examples where the FCA partnering with the government and others “wasn’t as strong as it needed to be”.

Pointing to the example of pension freedoms, Randell said that the speed with which the policy was introduced gave rise to a “very big” execution challenge for trustees, The Pensions Regulator (TPR), the FCA and the Money and Pensions Service (Maps).

“The policies and procedures necessary to mitigate the potential harm to consumers from the pension freedoms were still being retrofitted six years later,” Randell noted.

“With hindsight, more could have been done to protect people from risks introduced by the pension freedoms policy, particularly if more time had been given to prepare.

“It’s clear from the steps taken since 2015 that the policy itself and the broader system to implement it were found wanting.”

The lesson from cases such as pension freedoms, according to Randell, was that addressing many issues in financial regulation requires not just more effective regulators, but also more collaborative action across policymakers to deliver the ‘right’ outcomes in the real world.

“Policies that are based on real human behaviour,” he said. “And policies that are only introduced when the system is ready to put them into practice.”

Randell added that the FCA has been strengthening its partnerships with other regulators and public bodies, including the Financial Ombudsman Service, the Financial Services Compensation Scheme, Maps, TPR, and other digital regulators through the Digital Regulators Cooperation Forum.

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