The Financial Conduct Authority (FCA) has announced today that it will defer the implementation of default 'investment pathways' for pension drawdown by six months due to coronavirus.
The regulator also announced a six-month delay to planned changes to investment transfer rules, with the implementation date for both deferred to 1 February 2021.
Investment pathways are designed to help retiring investors who aren’t taking financial advice find a pre-selected investment strategy suited to their needs.
The investment transfer rule changes are designed to ensure transfers are executed faster and more efficiently, keeping funds invested in the market wherever possible.
However, the FCA said that companies must focus on supporting customers during the COVID-19 pandemic, and that delaying the implementation of these changes could help.
“We know that firms need to reprioritise resources to focus on preventing and reducing consumer harm during the pandemic,” the FCA said in a statement.
“We believe that the benefit to consumers from firms prioritising resources to deal with critical functions in the short term may outweigh the harm from delaying the implementation of some polices.”
Investment pathways were proposed by the FCA early last year, and are intended to prevent up to 100,000 savers losing out on pension income every year after moving into drawdown without advice.
It is hoped that the investment transfer rule changes will make it easier for consumers to move from one platform to another without liquidating their assets, improving competition and customer experience.
Hargreaves Lansdown head of policy Tom McPhail said: “These are important initiatives, designed to protect consumers, promote competition and to ensure firms are looking after customers’ best interests.
“Given the unique circumstances we all find ourselves in now, and the importance of maintaining good customer services, we are sympathetic to the FCA’s decision to press pause until the present COVID-19 crisis has passed.”