FCA’s Bailey Puts Pensions at Top of Agenda in His First Speechby
Andrew Bailey said pensions one of biggest concerns for FCA
First speech from Bailey since he took up the role in July
Andrew Bailey, the newly appointed head of the Financial Conduct Authority, used his first speech in the role to highlight the problems surrounding pensions and retirement savings, saying it is one of the biggest concerns faced by society and the regulator.
Bailey said the U.K. is facing macroeconomic problems in its attempts to provide for retirement because of the decline in annual GDP growth in advanced economies after the 2008 financial crisis. The chief executive officer was speaking Friday at the Pensions and Savings Symposium in Gleneagles, Scotland.
"When I look at the issues on the agenda of the FCA with its objective from Parliament to ensure that relevant markets function well, I think that pensions and long-term retirement savings are probably top of the list," said Bailey, according to a copy of his remarks. "Only part of what is a very broad issue falls under our responsibility because there are many other aspects of economic and social policy in which the issue falls, and that demands joined-up thinking and approaches."
Bailey’s comments come two months after he took up the CEO role. The regulator was unsettled for a year following the departure of Martin Wheatley, who was ousted by the government in July 2015. Bailey, who most recently was Bank of England deputy governor, is respected by many in the finance industry in light of his 30 years at the bank and experience running the Prudential Regulation Authority over the last three. The PRA was created in 2013 after the FCA’s predecessor, the Financial Services Authority, was split in two.
The U.K. government has made several changes to the country’s pensions system in recent years, including allowing people over the age of 55 to spend their retirement savings as they wish rather than being forced to buy an annuity -- a lifetime income from an insurer. More than 6 billion pounds ($7.9 billion) has been withdrawn from pensions since the measure was introduced in April 2015, according to figures published by the U.K. tax authority in July.
The FCA has worked over the last year to protect consumers and advise firms to make sure older customers are treated fairly. The regulator will open a consultation before the end of the year looking at the ways used to calculate restitution in cases of unsuitable advice.
The agency is examining pensions as a large number of companies have found deficits in recent months. Retail mogul Philip Green has been criticised for the collapse of his former U.K. retailer BHS, which threatens the retirement savings of 20,000 former workers. The pension deficit was as large as 571 million pounds in March.