The Retirement Outcomes Review (ROR), the terms of reference for which possess correct been published by the Financial Conduct Authority (FCA), comes at a period of “huge upheaval” for the UK pensions industry, according to Tom Barton of Pinsent Masons, the law firm behind

The ROR is piece of a programme of labor announced by the FCA to follow up on its market review of retirement earnings, which concluded in early 2015 correct priorto recent flexibilities in relation to pension access came into force. The labor will seize a closer see at how easily consumers can compare products and switch providers and how the reported increase in non-advised sales of more complex retirement products is affecting consumers, as well as the extent to which regulation is preventing product innovation and holding up recent market entrants.

“Deciding how to operate pension savings is unit of the most important decisions public will construct,” said Christopher Woolard, the FCA’s director of strategy and competition.

“For a competitive and innovative market, it’s crucial that the market developed in a way that allows consumers to engage with their options, shop around and switch providers where appropriate. We also desire firms to compete difficult for business, offering good outcomes for consumers through lower prices, products and services that meet customer needs, better customer service and wider choice,” he said.

Barton, a pensions expert at Pinsent Masons, described the FCA’s update as “a helpful summary of labor in progress”, but added that the industry needed to see this “shape piece of a wider, consistent policy in pensions and drawnout-term savings that includes Treasury developments such as the lifetime ISA (LISA) and the review of vehicle-enrolment and associated charges, scheduled for 2017”.

“The FCA is currently involved in a lot of important labor, getting beneath the skin of the market and trying to ensure a better functioning system for consumers. This is a challenge since it comes off the rear of huge upheaval in the shape of vehicle-enrolment, charges and governance developments and ‘liberty and Choice’. ‘Brexit’ and digital disruption/innovation in technology is also taking the market in unpredictable directions,” he said.

“There is an opportunity on the horizon for a number of loose ends to be pulled together, and ideally a depoliticised pensions and savings commission would be locate in place to formulate and deliver a drawnout-term vision. Unfortunately the short term tax wins available through adjusting pensions policy denote that a commission does not appear on the cards,” he said.

The FCA is seeking input from the pensions industry on a number of specific questions by 31 August 2016, which it will operate to inform its review. It has asked for evidence of to what extent consumers can compare and choose between the larger range of retirement products and options available to them, given what it uncovered about the difficulties of shopping around for annuities as piece of the retirement earnings market review. The regulator wants to discern whether consumers can “easily compare products, shop around, switch providers where they are not receiving what they desire, and construct good, informed decisions”, it said.

The regulator has also asked whether the greater variety and complexity of retirement products available is putting them off engaging in the purchase process, and the extent to which firms’ business models possess affected consumer engagement and switching. It is also seeking examples of “overly burdensome” regulation that may “constitute disproportionate barriers to entry or prevent useful product innovation”.

To accompany the terms of reference, the FCA has also published the results of behavioural testing it commissioned to test the effectiveness of the annuity comparison remedy that was proposed as piece of endure year’s review. It intends to construct this compulsory for firms, subsequent the testing showed that the operate of comparison tools at the point of purchase increased shopping around from 13% to 40%.