In light of the increasing number of scams and growing culture of nuisance calls, the passing of the Financial Guidance and Claims Bill will mark an important step forward in ensuring that consumers are better protected and given the help they need to understand and deal with financial issues.
This blog outlines 5 key ways the Bill will help consumers in the UK:
Making things simpler for pension savers
Three years on from the introduction of pension flexibilities, retirement options are more abundant, but as a result have become more complex than ever before. Merging three existing guidance bodies into one will help ensure consumers are able to seek the help and advice they need to manage their finances more easily, and make it better for people to understand their pension options.
Engaging people for their retirement
The new guidance body will play a key role in ensuring people engage with the right information at the right time, and during different points in their life. Alongside this, the ABI’s recently-launched five point plan aims to empower consumers to make their own, well-informed decisions through earlier communications and use of guidance.
Protecting consumer assets
The Government's decision to bring forward a ban on pensions cold calling before the end of June was welcome news. Pension scams and nuisance calls have proliferated in recent years and tackling them has remained a key sector priority. But, for a ban to be successful - it needs to be accompanied by an awareness-raising campaign and further measures to clamp down on dodgy schemes.
Supporting vulnerable customers
The single financial guidance body will also help people whose financial needs and understanding are interlinked, providing free and impartial support. In the long-term, it’s hoped that the new body will expand to offer a full range of guidance services, including pensions dashboards and guidance on how individuals can prepare for unexpected financial shocks and build financial resilience.
Improving the regulation of Claims Management Companies (CMCs)
The second part of the Bill provides for the transition of the regulation of CMCs to the FCA, which was proposed by the ABI in our response to Carol Brady’s independent review of CMC regulation. For a long time now disreputable firms have helped fuel a compensation culture that impacts insurance costs for the average consumer - tougher regulation of CMCs will help send a strong message.
More widely, these measures are also an important part of ensuring the success of the Government’s efforts to tackle bad practice in the personal injury claims market, including changes to the Civil Liability Bill and the proposed increase in the Small Claims track limit.