The FCA has today outlined how its probe into the failing annuities market will examine the changing landscape in pensions created by the Government's overhaul of the system.
The FCA reported earlier this year that its research had found the annuities market was letting down consumers and in response, launched a deeper investigation into the sector.
However, since this was announced a shockwave was sent through the industry with the Chancellor's radical reforms in the Budget.
With the need to buy an annuity scrapped and other major changes in the pipeline, the regulator has now remodelled its investigation to incorporate these key points.
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One of the most significant aspects of the Coalition's reforms was the free and impartial pensions guidance.
The FCA said today it is already working with the Government to develop this and its market study will "identify whether there are issues to address in the final version of the guidance guarantee as well as whether there are wider consumer protection issues that the FCA should also address."
FCA officials will conduct a comparative analysis of international approaches to retirement planning in countries where annuitisation is not compulsory.
The FCA said in the update on its investigation today: "In light of the Budget changes we will look to understand how consumers, providers, and distributors are likely to behave in the new market landscape in order to assess potential competition risks and vulnerabilities (e.g. complex and opaque product innovation).
"Although the true impact of the Government's reforms is likely only to be known after some years, many of the features of the market we are concerned about may persist. There are also new issues that we will need to consider."
The regulator will look at new products and business models which are likely to arise from the Budget.
It said: "We will look to understand how the market is likely to develop in these respects and in relation to existing products in order to identify potential competition risks and vulnerabilities to consumers in the new landscape.
"We will assess the value for money associated with consumers adopting different at retirement strategies in the future landscape.
"We will use current market conditions and existing products to establish a current baseline."
The regulator said the greater flexibility and choice created by the Budget reforms the consumer's decision becomes more complex.

The FCA is inviting comments and views on the market and will collect these as part of its investigation. These need to be sent by 18 July.

To take part email your comments to This email address is being protected from spambots. You need JavaScript enabled to view it.

Or write to:
Retirement
Income Market Study Team
Competition Department
Policy, Risk and Research Division
Financial Conduct Authority
25 The North Colonnade
Canary Wharf
London E14 5HS 

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