CP25/39: Adapting our requirements for a changing pensions market – a positive proposal but not without its challenges

EXECUTIVE SUMMARY

The FCA and TPR have several major consultations underway this year, as part of a wider programme of policy change that includes the Pension Schemes Bill, the Pensions Commission, the Value for Money framework, targeted support and pensions dashboards. As part of our series exploring these proposals and their possible impact, this article looks at CP25/39 and its relevance for SIPP and SSAS providers.

CP25/39 proposes a new regime for interactive digital pension tools, updates to COBS 13 (‘Preparing product information’) in the FCA Handbook, and introduces a mandatory, standardised comparison process for DC‑to‑DC transfers designed to reduce convenience‑led consolidation and support the Consumer Duty. 

Providers should now assess how these proposals affect SIPP and SSAS transfers, and the operational steps required to meet the FCA’s new data‑gathering, disclosure and digital governance expectations.

INTRODUCTION

FCA’s consultation CP25/39 sets out why it believes its current rules no longer reflect how consumers engage with saving for their retirement in a pension. DC arrangements now dominate the market, but offer fewer built‑in protections. At the same time, savers increasingly rely on online modelling tools and mobile apps to explore outcomes, and the upcoming Pensions Dashboards regime is expected to accelerate consolidation of small DC pots. Against this backdrop, the FCA is seeking to anticipate areas of foreseeable consumer harm by consulting on two targeted changes designed to improve clarity and comparability for consumers making decisions about their DC pensions. 

• The first proposal focuses on interactive digital pension tools. The FCA invited views on adapting the existing COBS 13 projection rules so that simulations used by consumers are clearly evidenced, consistently presented and genuinely comparable across providers. The FCA is aiming to strike a balance between allowing firms to innovate and ensuring consumers are not left comparing fundamentally different assumptions when making decisions, such as whether to consolidate.
• The second proposal concerns the information provided before a non‑advised DC‑to‑DC transfer. Here, the FCA is consulting on a standardised process requiring firms to obtain information from ceding schemes and present a side‑by‑side comparison that highlights less obvious, but potentially valuable, benefits in the pot a consumer is thinking of transferring away from — ensuring these are not overlooked in a straightforward “small pot into big pot” consolidation, or one motivated by the incentives, offer or simply convenience of one provider.

For those operating SIPP and SSAS books, these consultations form part of a wider regulatory shift. We will soon be turning to what the FCA and TPR’s emerging Value for Money Framework means for DC arrangements, and how providers should prepare. 

In this article we consider the Society of Pension Professionals (the “SPP”) response to CP25/39 and draw out the implications and potential risks for SIPP and SSAS operators to be aware of in relation to the FCA’s proposals.

THE SPP’S RESPONSE TO CP25/39

The SPP broadly supports the FCA’s consultation and offers practical commentary on the challenges firms will likely face. Their central message is that interactive tools must produce clear and genuinely comparable outputs, and that the Consumer Duty cannot be expected to resolve all divergences created by flexible modelling. The SPP encourages the FCA to introduce clearer guardrails on growth assumptions and to promote alignment across regulatory regimes, while also recognising the resource demands created by more sophisticated tools. For SIPP and SSAS providers the SPP’s comments underline the value of clearer minimum standards, so that firms are not left to make difficult Consumer Duty judgements without firmer regulatory boundaries.

• In their response to Question 16, the SPP asks the FCA to confirm whether the proposed transfer process is intended to apply to both statutory and non-statutory transfers, and to clarify the extent to which the requirements apply to occupational pension schemes. Operators with both SIPP and SSAS books will want this clarity so that they can understand which parts of their business would be in scope and begin preparing for compliance. The SPP also notes that if SSAS arrangements were to fall outside these proposals, this could create an unintended outcome where they drop out of the comparison process entirely.
• The SPP also uses its responses to Questions 4 and 5 to highlight that not all providers have the resource to build sophisticated modelling tools or to make detailed judgements about growth assumptions, and that relying solely on the Consumer Duty may leave firms uncertain about how far they should go. Their response to Question 24 reinforces this point by noting that clearer parameters on the use of incentives would support more consistent decision making. Together, these responses point to the value of firmer minimum standards across modelling, assumptions and incentives, something that many SIPP and SSAS providers may also welcome so that decisions are not left entirely to an assessment of what is necessary to comply with Consumer Duty. Uncertainty is likely to increase the risk of consumer complaints, something all firms clearly want to avoid.
• In Question 12, the SPP warn that consumers are likely to focus on headline figures and assume they are comparable, even though the underlying calculations are complex and forward looking. The SPP observes that digital tools often function as marketing opportunities for providers, which underlines the need for further work to ensure that comparison figures are genuinely comparable and don’t increase the risk of unwanted consumer complaints. The SPP also warns that authorising digital simulations without first addressing inconsistencies between projection frameworks risks “putting the cart before the horse”. They sensibly call for a common view across contract-based and trust-based regimes on what constitutes a permissible and comparable projection.
• In Question 9, the SPP calls on government departments and regulators to align their projection regimes, noting that “inconsistencies between the two regimes continue to lead to confusion and complaints from savers”. This is a point that many SIPP and SSAS providers may recognise in their own experience of navigating multiple regulatory frameworks.
• In response to Question 21 the SPP note that FSCS protection should not be overlooked, and that firms should explain how a transfer may change or reduce that protection. They suggest that this information ought to be a required data point from ceding schemes, something many SIPP and SSAS providers may support given the importance of clear and consistent disclosure for members.
• In Question 18, the SPP cautions that the proposed ten-day timeframe for ceding schemes to provide data may be difficult to comply with in more complex cases. They suggest a target-based approach that still delivers timely information but recognises operational constraints. 

We consider that these points reflect the importance of clarity and consistency across the whole comparison process, something that operators of SIPP and SSAS books will need to factor into their planning.

RISKS OF THE FCA’S PROPOSALS  

• Clearly with any change to service delivery to consumers there is the risk of potential harm and increased complaints. Early engagement and preparation with the FCA’s proposals will be key to ensure the necessary internal mechanisms are implemented, with clear systems and controls in place to evidence proper compliance.
• The FCA expects firms to align design, communications, and testing of simulations to the Consumer Duty. It will, therefore, be important to consider how best to deliver good outcomes for all customers, including vulnerable customers. Around 60% of adults in the UK show at least one characteristic that could make them potentially vulnerable – so ensuring that customers are genuinely able to understand and engage with interactive tools will be key. For more on the FCA’s approach to vulnerability, see our recent article on FCA Priorities: Vulnerable Customers and Financial Communications here.
• The SPP has cautioned against regulators introducing unnecessary cost and complexity for schemes and providers in the current proposals, for example, with the proposed introduction of the additional administrative step of an acknowledgement process.  It is important that Firms engage with the FCA on these proposals to ensure they are workable in practice. 

KEY REFLECTIONS 

CP25/39 signals a move toward clearer modelling, more consistent comparisons and a stronger focus on informed decision making across the DC pensions market.  Whilst this presents an obvious benefit for consumers, it also raises a number of key challenges for SIPP and SSAS providers. 

In terms of how to best address these challenges, providers with SIPP and SSAS books should consider sooner rather than later: 

1. how the proposals may apply across their schemes 

2. the system, governance and data requirements that a more structured comparison process will necessarily require

3. the practical issues already helpfully raised by the SPP and

4. how best to address the potential risks that may follow from any future regime, including by way of pre-deployment testing and ongoing monitoring.  

The consultation closes for responses today, 12 February 2026 and the FCA has indicated that following its review of the feedback to the consultation it will look to publish a Policy Statement with final rules in the latter half of 2026.  We will report on further developments then.

In our team, Madeleine Chambers, Hercules Phillips and Hannah Miller have been considering the consultation and SPP’s response. If you would like to discuss the points raised in this article please contact any of the authors, Suzanne Padmore, Alice Honeywill or your usual Burges Salmon contact.