Posted: 5th October 2018


In March 2018, the FCA published consultation paper CP18 / 17, proposing further changes to the rules and guidance around advising on the transfer of safeguarded benefits. Following this, and a second consultation in June, the FCA has now introduced new rules with the goal of improving the advice people receive when considering transferring their pension.

PS18 / 20 aims to address issues related to consumers receiving unsuitable advice in regard to guaranteed pension income products and raise the standard of advice given in general. This publication confirms that the FCA is taking forward most of the proposals from the initial consultation.

Defined Benefits (DB) pensions, and other forms of guaranteed pension income are, according to the FCA, of value to those in retirement and so consumers should generally be advised to hold onto them. Unsuitable advice could lead to significant consumer harm, causing them to give up benefits that would otherwise provide for them into their retirement. Because of this, the FCA aims to ensure that those providing regulated financial advice do so with a full understanding of their clients’ circumstances and the full range of options available to them.


Central to the changes will be a new requirement for all pension transfer specialists to hold a specific qualification for providing advice on investments by October 2020. This qualification will be needed to prove that the adviser can identify whether a proposed pension scheme and investment solution is suitable for the client. The FCA also expects such professionals to consider their clients’ understanding of the risks of giving up safeguarded benefits in favour of flexible benefits.

The new rules and guidance include:

  • Raising qualification levels for pension transfer specialists (PTSs), requiring them to obtain the same qualification as an investment adviser alongside the existing PTS qualification
  • Laying out how firms can carry out an appropriate ‘triage’ service without stepping across the advice boundary by providing generic, balanced information on the merits of pension transfers
  • A requirement for firms to provide a suitability report no matter the outcome of advice
  • Updating the assumptions to be made when valuing increases applied to DB scheme benefits, where there are upper and lower limits applying to inflationary pension increases

The FCA has also considered a ban on contingent charging – when a fee for advice is only paid after a transfer has gone ahead – though this is a complex area with significance to all stakeholders in the market. As such, the FCA has decided not to implement such a ban, instead focusing on carrying out further analysis of the issue drawing from their supervisory work.


Pensions transfer specialists will be required to hold specific qualifications for providing advice on investments by 2020. Preparations should be made to ensure that relevant parties are able to undertake the programme to receive this.

There are a variety of other key dates and considerations for firms which are outlined below.


Firms should note the changes in the policy statement and make amends to their policies and procedures where necessary. The changes outlined in the regulation will be staggered out over several months, giving firms time to react to and implement the new requirements. The changes and relate important dates are listed below:




Introduction of Appropriate Pension Transfer Analysis (APTA) and Transfer Value Comparator (TVC) 1 October 2018 PS18 / 6
Suitability reports for all advice 4 October 2018 PS18 / 20
Guidance on assessing attitude to transfer risk 4 October 2018 PS18 / 20
Guidance on working with another adviser 4 October 2018 PS18 / 20
Perimeter guidance on triage services 1 January 2019 PS18 / 20
Updated assumptions to use when revaluing benefits 6 April 2019 PS18 / 6
Updated pension increase assumptions 6 April 2019 PS18 / 6
New qualification requirements 1 October 2020 PS18 / 20
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