FCA finalises its rules for a "stronger nudge" to guidance

The Financial Conduct Authority (FCA) has published final rules for a "stronger nudge" towards Pension Wise guidance. These will come into force from June 1, 2022 and will mean that providers of contract-based DC schemes (personal and stakeholder pensions) must ensure that members have taken or opted out of Pension Wise guidance before they flexibly access or transfer their DC benefits.

The DWP is due to finalise its own “stronger nudge” rules for occupational pension schemes which are expected to come into force from April next year. Although it has worked closely with the FCA on this, confusingly for members there are small differences between the two stronger nudge regimes. In particular, a member of an occupational pension scheme who has already taken advice will not need to seek Pension Wise guidance before transferring whereas they will need to do this before accessing any personal pensions they may have.

Trustees and personal pension providers may find they receive enquiries from members with both types of pension as a result of these discrepancies.