FCA warns pension investors need greater drawdown protection

Accessing pension pots early has become ‘the new norm'

The Financial Conduct Authority (FCA) has identified areas where 'early intervention' may be needed within the retirement income market, as a result of substantial changes following the introduction of pensions freedoms.

In the interim findings of its Retirement Outcomes Review, the regulator found 53% of pension pots accessed by consumers since the rules came into force in April 2015 were fully encashed, however 90% of those were below the value of £30,000. In addition, 94% of consumers making full withdrawals had other sources of retirement income in addition to the state pension, the FCA found. However, the regulator also revealed 52% of fully withdrawn pots were not spent but were moved into other savings or investments. Some of this was due to a lack of public trust in pensions, it said, warni...