Changes proposed by the FCA may help prompt more people to seek pension advice


The FCA paper issued today on pension reforms looks to increase the level of information communicated from providers to pension customers. The intention is to ensure the customer is continuously updated with relevant information that will help them not only with an initial decision but with ongoing decisions. These extra measures will make it more explicit to customers if their current level of income is unsustainable, and could act as a prompt for them to seek financial advice.

According to research from YouGov and Old Mutual Wealth, when people have a financial plan in place and see a financial adviser regularly they receive, on average, 53% more retirement income, so anything which may prompt customers to seek advice will be of benefit.  Advice is also valuable as a pension may not be their only source of income in retirement, so looking at a holistic plan can really benefit customers.

Increased protection for those in debt

One of the specific proposals outlined in the paper is to make it clear that creditors must not pressurise customers to use their pension savings to repay a debt. The proposals seek to remind both debt collection and advice firms that ‘advising on the conversion or transfer of pension benefits is a regulated activity’. This extra layer of protection means consumers can now check whether their adviser is authorised by the FCA to give them such advice.

This tougher stance could be an attempt to try and curb the amount of people using the new pension freedoms to pay-off debt; according to research* from YouGov and Old Mutual Wealth 1 in 5 currently assessing their pension fund are using the money to repay debt.

The research also shows that almost one-third of retired people are still in debt at the point they give up full time work. The average amount of debt at retirement is £34,500, with 19% of people having debts of over £50,000. Mortgage debt is most common, with 21% of people still owing money on their house when they retire, 14% owe money on credit or store cards, and 6% have unsecured loans.

Adrian Walker, pension expert, Old Mutual Wealth comments:

“Freedom and choice reform has made taking money out of a pension a lot more complex than it used to be, when for many it was a simple choice between different annuities. Anything which may prompt people to seek financial advice is a good thing. Not only do people need to decide how much income to access, they need to also consider whether taking money out their pension is the right thing to do from an estate planning perspective.

“People need to consider the best way of paying off their debt, and whilst many will prefer to pay off lump sum amounts to free themselves from the burden of debt, it may make better financial sense to pay off smaller amounts from income to help ensure a more sustainable pension income in the long-term.  Taking out lumps of capital will erode the income over the longer term and it is good that consumers will have extra protection.”

* YouGov Plc research:  Total sample size was 1649 adults. Fieldwork was undertaken between 15/05/2015 - 18/05/2015.  The survey was carried out online. The figures have been weighted.

Sophie Heywood (Lenton)  
Corporate Communications Manager | Old Mutual Wealth

M: +44 (0)7834 499 558

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Notes to editors:

Quilter is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

On a ‘go forward basis’, Quilter oversees £ 111.6 billion in customer investments (as at 31 March 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset and single strategy investment solutions; and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Old Mutual Wealth Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Old Mutual Wealth’s multi-asset investment solutions business.

The Quilter businesses will be re-branded to Quilter over a period of approximately two years following separation from Old Mutual:

  • Intrinsic to Quilter Financial Planning
  • Private Client Advisers to Quilter Private Client Advisers
  • The Multi-Asset business to Quilter Investors
  • The UK Platform to Quilter Wealth Solutions
  • The International business to become Quilter International
  • The Heritage life assurance business to Quilter Life Assurance
  • Quilter Cheviot will retain its name.

On 19 December 2017, Old Mutual Wealth announced that it has agreed to sell its Single Strategy asset management business to the Single Strategy Management team and funds managed by TA Associates. The proposed transaction is subject to customary closing conditions, including regulatory approvals. 

Quilter is part of Old Mutual plc, a FTSE 100 group that provides investment, savings, insurance and banking. For the year ended 31 December 2017, Old Mutual reported an adjusted operating profit before tax of £2.0 billion. For further information on Old Mutual plc and the underlying businesses, please visit the corporate website at


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