Non-workplace pensions include individual personal pensions (IPPs), stakeholder personal pensions (SHPs) and self invested personal pensions (SIPPs) as well as free standing additional voluntary contributions (FSAVCs), s32 buyouts, and retirement annuities.

The FCA estimates that together, these collectively represent around £400bn assets under management, more than double the amount invested in contract-based defined contribution (DC) workplace pension schemes.

Christopher Woolard, FCA executive director of strategy and competition, said: ‘We believe it is now right to look at the other side of the picture and assess whether competition is working in non-workplace pensions.

‘A diverse group of people save into non-workplace pensions and it is a growing market. We want to hear from anyone with an interest in this subject about how they think the market is working.’

The FCA is looking to understand how the differences and similarities between the workplace and non-workplace markets impact competition and consumer outcomes. Particular areas of focus include product complexity; the factors which may reduce consumer motivation and ability to invest time and effort in decisions related to their pensions; whether customers can identify and freely move to more competitive products; and fund choice and the use of defaults.

The FCA is concerned that informal defaults may be operating in the market for non-workplace pensions that are not subject to the same protection as defaults in workplace pensions, and also wants to investigate whether providers are competing on charges and if there are barriers to consumers identifying, and choosing, from more competitive products.

The deadline for feedback is 27 April.

Effective competition in workplace pensions is here.

Report by Pat Sweet