Millions of Britons could be offered ‘game-changing’ help with investments and pensions | Personal Finance | Finance

Around 18 million Britons could receive extra help with their investments and pensions over the next decade through a “game-changing” rollout of targeted support, according to the Financial Conduct Authority (FCA).

The initiative will enable firms to provide specific guidance to consumers, helping them make more informed choices about managing their finances. Customers will receive recommendations, but they will not be based on a full, in-depth individual assessment. Companies must ensure their recommendations are appropriate and should only present them when they improve people’s circumstances, the watchdog stated.

These modifications are expected to help narrow the “advice gap” whilst enabling more individuals to make appropriate financial choices for their circumstances.

Whilst people can obtain personalised guidance by purchasing financial advice, fewer than one in 10 Britons secure regulated financial advice – meanwhile, nearly one in five seek assistance from relatives, friends or social media platforms when making decisions, the regulator noted. Investment values can fall as well as rise, yet investments frequently outperform cash savings over extended periods.

On Monday, the FCA set out changes designed to boost consumer access to investments and enable individuals to make well-informed decisions about risk.

The regulator is proposing fresh regulations for investment product information, whilst establishing clearer distinctions between retail and professional investors who may fall outside retail regulatory requirements.

These measures form part of broader initiatives to “shift attitudes towards risk” and steer investors beyond merely holding cash, the watchdog explained.

New legislation will need to be passed before targeted support goes live.

The regulator said firms which can show they are ready, willing and organised to undertake targeted support will be authorised swiftly after the provisional go-live date in April 2026.

FCA figures reveal that approximately seven million British adults holding £10,000 or more in cash savings may be missing out on investment benefits throughout their lifetimes.

The proposals support the Government objectives to build a retail investment culture across the UK.

The FCA has additionally introduced a “firm checker” tool aimed at preventing individuals from falling victim to fraudsters, with approximately 800,000 people reporting financial losses to investment or pension-related scams in the 12 months leading up to May 2024.

The resource is available on the FCA’s website at www.fca.org.uk/consumers/fca-firm-checker.

Sarah Pritchard, deputy chief executive of the FCA, said: “Targeted support will be game-changing. It means millions of people can get extra help to make better financial decisions.

“We also hope it will build greater confidence to invest. While investing will not be right for everyone, we know people in the UK invest less compared to the EU or US. People in the UK could be missing out on the potential benefits of investing in the medium to long term.”

Yvonne Braun, director of policy, long-term savings at the Association of British Insurers, said: “Targeted support has the potential to make a real difference to people’s financial lives.”

She added: “At a time when only 9% of people take regulated advice, targeted support will give people help they can rely on when making complex financial decisions. The FCA’s new rules mark a significant step towards closing the advice gap and will empower millions.”

Keith Phillips, chief executive of investment platforms trade body The Platforms Association, said: “The industry has long called for the freedom to present information in ways that genuinely help customers understand their investment choices.”

He welcomed the initiative, saying: “We welcome the FCA’s targeted support initiative, which will allow platforms to deliver the right information, at the right time, to support customers to make the right investment decision. The previous system was far too prescriptive, with disclosure templates that people really struggled to engage with.

“Improving financial education is essential to giving new investors the confidence to take that first step toward making their money work for them.”