FCA Warns Legacy Pension Savers Face Poor Value Due to Complex Charges and Outdated Designs

According to the Financial Conduct Authority, millions of consumers holding older pension products may receive poorer value than those in newer products due to complex charging structures, outdated product designs and weak customer data, the regulator said following a multi-firm review of unit-linked non-workplace pensions.

The FCA found that some firms have not addressed structural issues affecting customers in closed legacy pension products. However, the regulator highlighted examples of firms improving outcomes through product simplification, charge reductions and customer data comparisons, with expectations for such practices to become standard across the market.