The Financial Conduct Authority (FCA) has hailed its forthcoming targeted support framework as a “revolutionary” step in helping pension savers make more informed decisions, although industry experts have cautioned that data privacy barriers could limit its reach.

Speaking at The Investing and Saving Alliance's (TISA) Annual Conference 2025, FCA executive director for markets and international, Sarah Pritchard, warned that while there was no "one-size-fits-all" solution to the challenges facing the pensions landscape, both targeted support and pensions dashboards offered hope in closing the advice gap.

“We know that people need more help to make decisions, and it’s crucial that people have support available so they can make informed decisions based on their risk appetite,” Pritchard said.

“Targeted support is designed to do just that. It’s revolutionary - not just in terms of the rules set, but in terms of how we’ve worked on it, as the regulatory framework is new.”

The FCA has been working to develop a new framework that aims to enable firms to provide personalised, data-driven assistance to consumers without crossing the regulatory threshold into formal financial advice.

The regulator recently launched its latest consultation on targeted support, seeking views on changes to its handbook rules designed to ensure that the proposals work effectively alongside existing requirements.

Pritchard suggested targeted support could help address a concerning decline in retirement confidence, which reached a new low amongst UK adults ahead of the Autumn Budget, according to the latest UK Retirement Confidence Index from Nucleus, revealing a growing sense of pessimism about retirement prospects.

Pritchard also stressed that targeted support could play a key role in tackling unregulated advice, explaining that providers would be specifically authorised by the FCA to offer such services.

“In terms of mitigating the rise of unregulated advice, I think targeted support will be a really important development,” she continued.

“People providing targeted support will be specifically authorised by the FCA to do that, giving greater confidence that the recommendations made are regulated.”

However, in a later panel session, TISA head of savings policy, Sophie Le Grand, warned that practical challenges surrounding data sharing and privacy could limit the extent to which targeted support can be offered.

She stressed that current data protection rules meant firms are only able to offer targeted support to a fraction of their customers - typically those who are already more financially engaged.

“Targeted support is fundamentally different from advice,” she explained.

"So one huge barrier facing us is data privacy regulations. We heard from our members that, as a result, they would currently be permitted to offer targeted support to roughly 25 per cent of their existing customer base - likely the most engaged customers, rather than the target market.

"Targeted support is for people who are disengaged with their finances.”

Le Grand confirmed that TISA was continuing discussions with the FCA and Treasury “about the scale and shape of this problem”, with one proposed solution being to introduce targeted support on an opt-out basis.

TISA has previously urged the FCA to reconsider its proposed changes to the targeted support regime, warning that these could cause confusion, erode consumer confidence, and create unnecessary operational challenges for firms.

While strongly supporting the regime in general, TISA raised concerns about the FCA’s proposed mandatory signposting requirements for pension communications and its approach to remuneration disclosures.

Indeed, Le Grand concluded that “the proof would be in the pudding” regarding the outcome of the targeted support proposals.

The FCA and Treasury are expected to publish the next stage of their proposals later this year.

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