In response to the FCA’s publication, ‘Investment pathways: Post-implementation review’, Jon Greer, head of retirement policy at Quilter has commented.
He said:“How you access your pension savings is one of the most important financial decisions you will ever make, particularly in light of pension freedoms and the increasing prevalence of defined contribution pension schemes, so it is positive to see the Financial Conduct Authority’s investment pathways have been well received by those that need them most.
“Introduced in February 2021, investment pathways intended to address the difficulties people experienced when accessing their funds. Savers going into drawdown face a dizzying array of decisions and challenges, which is compounded if they are unadvised, and investment pathways are having a positive impact in terms of helping people navigate these decisions at what is such a critical point.
“While this is a good starting point, the FCA has recognised that it needs to take a more holistic view of how it can best support consumers through their pensions journey. A close working relationship with the Department for Work and Pensions and The Pensions Regulator will be key to ensure that members receive support to achieve good outcomes regardless of the type of scheme they are in.
“The FCA’s post-implementation review comes as the DWP launches its own consultation today to help savers understand their pension choices. Decumulating from a pension can be challenging, particularly without professional financial advice, so it is important that the FCA and the DWP work closely in this area.
“While initiatives such as investment pathways make it easier for non-advised savers to choose investment solutions aligned to their specific desires and drawdown objectives, they are no substitute for financial advice. Everyone’s financial make up is different as well as their financial objectives, and advice often helps those who live well below their means for much of their retirement unnecessarily by illustrating exactly how much they can afford to drawdown without fear of running out.”