The FCA will strengthen its proposals on the pensions guidance service to protect consumers in light of industry concerns and following fears raised in Parliament over another mis-selling scandal.

The regulator said that although existing rules have clout for ensuring consumer outcomes it will examine the matter more deeply.
It has published the response to its consultation on the retirement service and reported some stakeholders calling for a 'backstop' or'second line of defence' for those who pass up on the guidance.
Shadow Minister for Employment Stephen Timms told Parliament this week he agreed with this, saying providers had made "a telling case".
He fears that unless extra safeguards are built into the new system consumers will be left exposed.

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The FCA report stated: "Responses to the consultation and subsequent conversations with stakeholders have highlighted broader concerns about the risk of consumers making poor decisions, particularly where they do not take up the guidance. Some stakeholders have called for a 'backstop' or 'second line of defence' for those who do not take the guidance.
"We believe that there are existing requirements on firms that bite in this area and we are strengthening the proposed amendments in light of responses.
"We will undertake more analysis to identify whether further requirements on firms are necessary."
Although the FCA stressed that it is an individuals choice to take up the guidance offer or not and that it is merely one part of the package to help consumers. But it will bolster proposals to ensure their interests are met.
The FCA said it will require firms to refer clients to the pensions guidance and encourage them to seek guidance or advice on their retirement options, unless the customer has already received advice from a regulated firm or has used the pensions guidance service.
The report said: "This means that firms will have to ask whether their customer has taken pensions guidance or regulated financial advice, and if not to encourage them to do so."
The report was published two days after MP Mr Timms claimed retirees could become "guinea pigs" threatened by the "real possibility of another mis-selling scandal" when the pension reforms come in next April.
The FCA said the particular concerns raised by consultation respondents were broadly around the following two scenarios:

• Consumers, who choose not to take up the offer of the pensions guidance service, might go on to access the funds in their pension without understanding the implications of their decision and with no check of whether they have considered all relevant factors.
This concern is heightened for consumers who go back to their existing pension provider, and do not shop around.

• Consumers who do take the guidance then seeking to buy a product from their existing
provider, or a new provider, that doesn't meet their needs.

A broader, overarching review is going to be carried out next year by FCA officials covering "all the requirements on firms in the pension and retirement markets".
It stated: "This work will take into account the results of the thematic review of annuity sales practices and provisional findings of the Retirement Income Market Study. It will also build on work that is already underway with the Treasury, industry and occupational pension scheme representatives on developing standardised, consumer-tested, communications documents."