Improving the consumer pensions journey: ‘I wouldn’t start from here’

10th September, 2021

  • The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA) launched a ‘call for input’ (CFI) earlier this year, asking the pensions industry for views on how consumers make decisions about their pension at key points throughout their working lives.

    In particular, the CFI sought views on whether the current understanding of the consumer journey is an appropriate foundation for regulatory policy making, which reminded me of the old joke about a visitor to a village stopping a local and asking, “How do I get to [pick your destination] from here?” and the local answers “If I were going there then I wouldn’t start from here!”

    TPR and the FCA want to make sure that they are starting the consumer journey from the right place “to determine whether we have identified the right areas to explore further and will inform regulatory interventions and actions in the years to come”. Indeed, their first question asks for input on whether “this understanding of the consumer journey is an appropriate foundation for regulatory policy making”.

    The call for input

    The backdrop to this CFI is the changing pension landscape brought about by automatic enrolment, the pension freedoms and the shift away from defined benefits towards defined contributions.

    Whilst it is recognised that a significant amount of work has already been done to improve consumer protection, there is significant evidence showing that people do not engage with their pensions. Unfortunately, this lack of engagement leads to key risks of consumers remaining invested in badly performing products, being more susceptible to scams and struggling to make optimal decisions regarding their pension savings. So, against this backdrop of pension savers’ decision-making, or sometimes lack of it, which has such a key role in outcomes and consumer protection, this consumer behaviour CFI sought to explore what more can be done to help support people in their choices. The CFI focussed on the first two stages of the pensions consumer journey (starting up a pension and accumulating), acknowledging that the journey does not always follow a straight path and some decision points will reoccur during a saver’s lifetime.

    ‘Key points’

    TPR and the FCA want to understand how they can help at ‘key points’ in the consumer journey to improve pension outcomes, including the best points at which to offer consumers support, who is best placed to provide the support, and how it can be done. Suggestions for feedback included “harnessing behavioural biases and values, embracing innovation, or engaging employers to provide more support to employees or the regulatory environment”.

    The issues raised are equally applicable to contract and trust-based schemes, the CFI recognising that “the saver is unlikely to know, or care which regulatory remit they fall under. Regardless of the regulatory remit, we want consumers to achieve similar outcomes from their savings, even if sometimes that is delivered through different interventions”.


     In this regard, the recognition of the ‘multi-stage’ life in the CFI and the different needs and challenges of ‘Baby Boomers’, ‘Generation X’ and ‘Millennials’ seems very relevant to regulatory policy-making. The emerging model, reflecting increases in longevity, is one where the boundaries between study, work, and leisure are more blurred.

    The CFI was wide-ranging with no issues ‘off the table’, including old chestnuts such as whether separate regulators – TPR and FCA – are “causing problems for the consumer journey”.

    Despite my quip at the beginning of this blog, understanding where we are now will have a significant impact on what we need to do. For example, current consumer behaviour has been influenced by communications that use complex and confusing language, regarding a subject that is often far off in the future, with this combination  resulting in low levels of importance and engagement. This needs to change, with the industry, regulators, employers and policymakers working together to improve member outcomes.  

    The response is awaited with interest.

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    • Published byPaul Tinslay

      Paul Tinslay is a Professional Trustee for DB and DC Pension Schemes, including Chair for Sole Trustee positions, and EGLAS arrangements. With 33 years in the Life and Pensions Industry, Paul has the very rare, if not unique experience of...

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