Pensions UK warns gaps in FCA’s simplified advice plans need addressing

Gaps in regulatory clarity and alignment in the Financial Conduct Authority’s (FCA) consultation on simplifying pensions and investment advice rules could limit their real-world impact, Pensions UK has warned.

In its response to the FCA’s Simplifying the Pensions & Investment Advice Rules consultation, Pensions UK argued that while the FCA’s plans have the potential to improve access to advice, better reflecting real consumer journeys, firms were unlikely to change behaviour without greater certainty on how the rules will be applied in practice.

The FCA’s consultation, which closed on 22 May 2026, sought views on how to make it easier for firms to give simplified forms of personalised financial advice.

The proposals are intended to help more people get financial advice for important decisions, working alongside targeted support to enable consumers to access a range of advice services.

Responding to the consultation, Pensions UK called on the FCA to provide greater clarity and examples on how “proportionality” and “sufficient information” should operate in practice.

It also asked the FCA to set out how the Consumer Duty will be applied and supervised in simplified and limited advice models.

The response encouraged the regulator to revisit the wider advice guidance boundaries surrounding targeted support, to ensure that the continuum of support works as intended to provide savers with the help they need at the right time.

It also called for stronger regulatory alignment, and further work to ensure communication is clear so consumers understand the difference between limited and full advice and are not exposed to avoidable risks.

Pensions UK senior policy adviser, Sophie Smith, said: “Simplifying the advice framework is critical if we are going to enable more people to access high-quality support at retirement rather than being priced out of it.

“But changing the rules alone will not shift behaviour. Firms need real clarity on how these reforms will work in practice, and confidence that proportionate advice will not be judged against full advice standards after the event.

She added that without that regulatory certainty, there was “a risk the system looks simpler on paper but feels just as complex and risky to deliver,” which would ultimately limit access for consumers and mean many continue to be priced out.

“Getting this right means combining flexibility with clear guidance, so firms can innovate with confidence, and savers can get the support they actually need," Smith concluded.

This article originally appeared in our sister publication Pensions Age.

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