The FCA published policy statement PS19/1 at the end of January 2019, looking at how they plan to tackle some of the issues they’ve identified in the retirement market.
Phase 1 of this Retirement Outcomes Review was introduced on 1 November 2019, with phase 2 following on 6 April 2020 and phase 3 on 1 August 2020.
Here we look at what’s changing for phase 2 and what this means for your Royal London clients.
From Monday 6 April 2020, all pension providers will need to include a new one-page summary with any drawdown and UFPLS key features illustrations (KFI).
This one-page summary will provide key information such as when the customer’s pension savings are likely to run out and their first year’s charges.
Drawdown KFIs must also be produced in real terms, rather than monetary terms, bringing them in line with other illustrations customers will receive throughout the lifetime of their pension plan.
The rules around when a customer should receive a drawdown KFI will also change. As well as sending customers a drawdown KFI and any other relevant information the first time they move money into drawdown or take an income or UFPLS payment from their plan, providers will also need to send them a drawdown KFI and any other relevant information, to help them understand the impact of their request when they ask to take further tax-free cash and UFPLS payments.
Providers will also need to give customers enough information to review their decision, no more than 12 months from the date they first take tax-free cash, income or UFPLS payments.
Download a sample of the new one-page summary / New Business drawdown illustration your Royal London clients will receive.