Investing and pension planning is in the spotlight, especially after chancellor Rachel Reeves cut the cash ISA allowance in the Autumn Budget last month, in a bid to encourage people to invest.
But, for those who save in cash only and have a minimum oversight over their pension, a new framework set to be launched by the regulator could help you make the most of your money.
The Financial Conduct Authority (FCA) is set to roll out the ‘Targeted Support’ service in April 2026, the new financial year, subject to government legislative approval.
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It means investment firms will be able to make financial suggestions to consumers who are not making the most of their savings, investments or pension pots – for example, someone with an undiversified investment portfolio, or someone who has significant sums sitting in a current account not earning interest.
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It is understood consumers will be contacted by firms both reactively and proactively. This means a customer calling their pension provider to talk about how much they have left in their pot may be told they are drawing down too much and could run out of money later into retirement.
Other customers might be proactively contacted by a financial firm advising them of changes they could make to increase the value of their savings or investments.
It is also hoped the new framework, which will have inbuilt protections for consumers, will boost growth in the UK economy by increasing the amount consumers invest.
It comes as the latest FCA data reveals around seven million savers with £10,000 or more in cash savings have not considered investing it.
Sarah Pritchard, deputy chief executive of the FCA, said: “These once-in-a-generation reforms will help people navigate their financial lives and give them greater confidence to invest. This is a win-win for consumers and firms alike.”
Firms will be invited to join Targeted Support from March 2026. If they are ready to, they will be authorised by the FCA to offer advice under the framework after it goes live in April.
The new service, which will be underpinned by the Consumer Duty, will see advice offered to groups of consumers with common characteristics, rather than personalised, in-depth assessments offered by financial advisors.
Firms will have to ensure any financial recommendations are fair and in the best interests of the consumer.
The FCA is also launching a consultation looking at ensuring people transferring their defined contribution pensions from one provider to another are well-informed.
The regulator estimates that over the next 10 years, Targeted Support will see at least 18 million people offered extra help with their investments and pensions.
When asked what provision will be put in place through the framework to protect consumers from potential scammers, a FCA spokesperson said: "Firms will need specific FCA authorisation before they can offer it, with rigorous checks at the authorisation stage and continued close supervision to prevent harm.”
“We have worked with our partners to give industry clarity—such as on how firms can contact their customers appropriately – while consumers will continue to have recourse to the Financial Ombudsman Service”
“We urge investors to use the FCA Firm Checker on our website to confirm whether a firm is authorised to carry out the right activities before engaging.”
Will Targeted Support be useful to consumers?
David Brooks, head of policy at consultancy Broadstone, said the FCA’s new framework could bridge a major gap between consumers and their knowledge of pensions and investing.
Just 8.6% of people received financial advice on investments, pensions or retirement planning in 2024, according to the FCA’s latest Financial Lives Survey, meaning large swathes of consumers are making key financial decisions without professional advice.
“Empowering firms to give consumers clearer, more tailored nudges is a sensible and pragmatic step that should deliver better outcomes for more savers and investors,” Brooks said.
“There is now a clear and concerted mission to extol the benefits of investment and its ability to deliver long-term financial security.”
Ben Hampton, CEO of Advice at pensions firm Royal London, said the framework put the financial services industry ‘on the brink of a transformative shift’.
“Its introduction promises to reshape how millions access financial help, particularly at critical life stages such as retirement,” Hampton added.
