Targeted support goes live on 6 April 2026 – what you need to know

We look at the final rules and their impact on FCA-authorised providers and occupational pension trustees.

INTRODUCTION

• Following on from our article last year on how the FCA’s developing approach to targeted support may affect trust-based pension schemes, this instalment considers the regulator’s latest step: the FCA’s publication of the final FCA handbook amendments and confirmation of how targeted support will be implemented. The new regime takes effect from 6 April 2026.

• The FCA has now set out how firms would be permitted to offer specific, situation‑based recommendations to groups of consumers who share common characteristics, marking a significant shift in how support can be delivered at scale. This is a further step in the FCA’s attempt to address low levels of consumer engagement, by setting clearer parameters around when and how firms can offer more tailored support without crossing into regulated advice.

• This article is one in a series we have published exploring the current programme of policy change in the pensions regulatory landscape. In February we considered CP25/39 (Adapting our requirements for a changing pensions market) which you can read here.

KEY FEATURES OF TARGETED SUPPORT

• Targeted support sits deliberately between generic information and fully personalised advice, allowing firms to offer structured, situation‑specific suggestions to defined groups of consumers without undertaking an individual suitability assessment. 

• The framework focuses on the careful design and delivery of ready‑made suggestions tailored to defined consumer segments, allowing support to be provided at scale while remaining appropriate and responsible. Although less personalised than individual advice, targeted support has the potential to reach significantly more people provided it is delivered competently and transparently. The FCA estimates that at least 18 million people could be offered targeted support within a decade. Firms must clearly explain the nature and limits of the support being offered, comply with existing product governance requirements and regularly monitor and review outcomes to ensure the support continues to meet consumers’ needs.

WHAT ARE THE LIMITS OF TARGETED SUPPORT?

• Ready-made suggestions involving annuities: Firms may direct consumers to whole-of-market annuity brokerages but cannot recommend a particular annuity product or provide quotations

  • Following consultation feedback, the FCA has confirmed robust limits on the use of targeted support in relation to annuities, while refining its original proposals. Although a majority of respondents agreed that firms should be prohibited from suggesting a particular annuity, some argued that banning quotations and commercial signposting reduced consumer understanding and introduced friction into annuity purchase journeys. Notwithstanding this feedback, the FCA maintains that “the degree of personalisation needed to recommend a particular annuity is inconsistent with a model based on groups of consumers sharing common characteristics”. It therefore remains the FCA’s position that firms may “only suggest an annuity as an access method and suggest annuity features”, and “will not be able to suggest a particular annuity product” or “provide a quotation”, including illustrative or average rates, as this would give the impression of a personalised recommendation. The key for firms will be ensuring that they stay the right side of the line between targeted support and personal advice, evidencing the fact that any suggestion was genuinely designed for a consumer segment. 

  • The FCA continues to require firms to direct consumers to the “MoneyHelper annuity comparison tool” within a ready‑made suggestion. However, in response to concerns that MoneyHelper is non‑transactional, firms may now also signpost consumers to “whole of market annuity brokerages”, provided no direct referral is made during the targeted support interaction. Instead, firms may explain that brokerage information will be provided once the targeted support journey has ended, and must clearly communicate that any subsequent steps form part of a “separate sales journey” – again clear delineation between targeted support and any more personalised services on offer will be key. Payments received for such referrals are excluded from the targeted support commission ban, but remain subject to existing inducement and transparency rules.

  • The FCA has decided not to proceed with a mandatory break between targeted support and a sales journey, noting the “frictions in existing annuity consumer journeys”, and instead relies on a “soft break” created by the MoneyHelper signposting requirement. Finally, annuity‑specific targeted support rules will not apply to fixed‑term annuities that contain a surrender option, as these are not “irreversible in the same way as a pension annuity”.

• Ready-made suggestions and pension consolidation

  • The FCA has confirmed that targeted support cannot be used to suggest pension consolidation, maintaining the position originally set out in CP25/17. In the consultation, the FCA explained that suggesting consolidation “into or out of a particular pension product” would require highly personalised data, resulting in “overly granular consumer segments” that are incompatible with a group‑based targeted support model. On this basis, the draft rules prohibited firms from using targeted support to suggest that consumers consolidate pensions “out of or into a particular product”, and this approach has been retained in the final rules. The FCA concluded that “it is unlikely that a pension consolidation suggestion can be designed within the targeted support framework”, as whether consolidation is appropriate depends on “a comprehensive consideration of an individual’s circumstances”, including the specific features and benefits of each pension pot and the consumer’s preferences.

  • This position was supported by a majority of respondents, many of whom emphasised the “substantial consumer risks associated with consolidation” and noted that achieving a better outcome would require a detailed, personalised assessment. However, a significant minority argued that consumers need more structured help with consolidation and suggested that future developments — particularly pensions dashboards — could make targeted consolidation support more feasible. In its consultation response, the Society of Pension Professionals (SPP) similarly highlighted the importance of access to consumers’ wider pension savings, warning that it would be “a retrograde step for providers to deal exclusively with the pension benefits that relate solely to them”, and questioning whether meaningful consolidation support could be delivered without a fuller data set (SPP response, 28 August 2025).

  • While firms are therefore prohibited from making pension consolidation suggestions, the FCA has been clear that they may continue to provide guidance on consolidation. Firms may describe “key factors that may be relevant to a consolidation decision” to groups of consumers, either before or alongside targeted support, provided that this guidance is not “so closely connected” to a ready‑made suggestion that it amounts to an explicit or implicit consolidation recommendation. To provide clarity, the FCA is also introducing guidance confirming that consolidation includes “any situation where a consumer is combining multiple pots into one arrangement”, while noting that wider reforms —proposed in CP25/39 — aim to ensure non‑advised consumers receive timely and appropriate information when considering consolidation.

CONSIDERATIONS FOR TRUSTEES OF TRUST-BASED SCHEMES

• Trustees of trust‑based schemes face distinct considerations when contemplating the provision of support akin to targeted support. Consultation feedback highlighted calls for clearer guidance from the FCA, DWP, TPR and HM Treasury on how targeted support might operate in the trust‑based market, with respondents noting potential inconsistencies with contract‑based schemes and difficulties in translating concepts such as “better outcomes” where trustees must act in the interests of the wider membership. 

• The FCA has reiterated that, as explained in DP23/5, members’ rights under an occupational pension scheme are generally not specified investments for the purposes of the RAO, meaning that support provided solely in relation to in‑scheme benefits will typically fall outside the FCA perimeter. As a result, trustees offering support of this kind will not be carrying on the proposed targeted support regulated activity, and FCA conduct rules and the Financial Ombudsman Service will not apply.

• However, this does not remove the need for careful judgement. Even where FCA regulation is not engaged, trustees must continue to discharge their fiduciary duties and duty of care, and should consider whether it is appropriate for them, in their capacity as trustees, to give advice at all. The FCA perimeter may become relevant where trustees provide support “by way of business” or where discussions extend beyond factual information or guidance into advice on FCA‑regulated investments, such as recommending an annuity or a specific drawdown product held outside the scheme. In those circumstances, authorisation may be required and the activity would fall within Article 53 or the targeted support regime.

• Additional complexity arises for FCA‑regulated firm‑backed master trusts and for trustees partnering with authorised firms. While in‑scheme support may remain outside the perimeter, regulated firms involved in designing segmentation or ready‑made suggestions, or in providing products to trustees, may still be subject to the Consumer Duty where they have a material influence over member outcomes. Trustees and sponsoring firms are therefore encouraged to consider whether aligning trust‑based support with the new COBS 9B framework would help deliver comparable outcomes across scheme types, while remaining mindful of trustees’ wider legal obligations and the evolving guided retirement proposals.

TARGETED SUPPORT AND GUIDED RETIREMENT

• Building on the reforms set out earlier in PS25/22, the FCA also highlights how guided retirement and targeted support are intended to operate together as part of the wider DC decumulation landscape. Guided retirement, developed through the workplace pensions roadmap, is designed to ensure that members who are less engaged as they approach retirement still have access to appropriate default pathways. Although not a formal consultation topic, respondents to CP25/17 frequently raised the relationship between guided retirement and targeted support, with some noting ambiguity about how the two frameworks interact. Several suggested that guided retirement may already give trustees a workable structure for delivering a form of targeted support, while others questioned how trustees could steer members toward default options involving FCA‑regulated products without straying into regulated advice.

• The FCA’s position is that the two regimes are complementary. Targeted support is intended to help members feel confident in making decisions about accessing their benefits, while guided retirement aims to simplify choices and reduce risks for those who do not engage. Detailed policy design remains in development. Subject to Parliamentary approval of the Pension Schemes Bill, the FCA expects to publish a discussion paper on implementing guided retirement in spring/summer 2026, alongside DWP’s corresponding consultation.

INDUSTRY IMPACT

Litigation

• The boundary between providing advice, guidance and targeted support remains a core litigation risk. It will be important that firms can clearly evidence how the service that they are providing sits within the targeted support remit: i.e. how what is being offered is structured, situation‑specific suggestions for defined groups of consumers as opposed to being personal advice.

• The original FCA proposals were that firms delivered “better outcomes” under targeted support and this has now changed, to many firms’ relief, to consumers being in a “better position” than they would have been without targeted support.  As this is an untested threshold in this context, the risk is that it becomes fertile ground for consumer complaints and is assessed with hindsight by the Financial Ombudsman Service (“FOS”).  Again, firms will want to maintain clear records documenting the ‘better position’ that the targeted support has produced for the relevant consumer groups.

Impact on FCA authorised firms

• Whilst this article focuses on the impacts of targeted support in the pensions landscape, it is worth noting that targeted support can also be used by firms in relation to investments, for example in relation to stocks and shares ISA’s and other retail investment products. For firms seeking authorisation to provide targeted support, careful consideration will need to be given to the new regulatory framework and how it applies across both pensions and retail investments. From a regulatory perspective, a number of key considerations emerge: 

• Firms must ensure that targeted support is only provided where it is reasonably expected to place the customer in a “better position”. The FCA has made clear that the Consumer Duty underpins the framework, and firms will be expected not only to design appropriate solutions but also to evidence, on an ongoing basis, how their approach delivers good consumer outcomes.

• The design of consumer segments will be critical. Firms will need to identify clear common characteristics, supported by robust data and governance frameworks, given the risk of mis-segmentation leading to poor customer outcomes. 

• Clear and effective customer communications will be required. Firms will be required to clearly disclose and label any guidance as “targeted support” and explain the relevant customer segment to which the customer has been allocated. Firms should also consider the risk of customers placing undue reliance on simplified suggestions. 

• Finally, firms will need to maintain clear boundaries between targeted support and regulated advice, supported by appropriate controls and oversight arrangements. 

OTHER STAKEHOLDERS

• The FOS has actively engaged with the targeted support reforms through its joint statement with the FCA published on 11 December 2025. In this statement, the FOS confirm that it had been working closely with the FCA to ensure firms have clarity on how complaints relating to targeted support will be assessed. The FOS emphasised that although most issues will continue to be resolved by firms themselves, any complaints that do reach the FOS will be considered in alignment with the FCA’s new rules, ensuring a consistent and proportionate dispute‑resolution approach as the framework is rolled out. 

• The Information Commissioner’s Office ("ICO") has also formally engaged with PS25/22 through a joint statement with the FCA published on the same day. This statement responds to industry concerns about how targeted support messaging sits alongside existing data protection and direct marketing rules. The ICO provides important regulatory clarity, confirming how firms can segment consumers and deliver tailored communications without breaching PECR or UK GDPR. The joint statement underscores the need to balance financial wellbeing with data protection rights, marking a coordinated regulatory effort to ensure targeted support can operate in practice while remaining compliant. 

HOW WILL THE FCA MEASURE SUCCESS?

• In CP25/17, the FCA set out an initial framework for assessing whether  “better outcomes” under targeted support are provided for consumers and sought views on how success should be measured. Respondents broadly supported this approach, with most agreeing both with the proposed success measures and the data points the FCA intends to use. Feedback emphasised that measuring success will be context‑specific and depend on the particular use case and outcomes a firm is seeking to achieve. Respondents also highlighted practical limitations, noting that outcomes are easier to track where a consumer remains with the firm providing the ready‑made suggestion, and significantly harder to assess where consumers act on a suggestion through a different provider, meaning outcomes cannot always be measured in full. Firms indicated they would rely on a mixture of quantitative and qualitative indicators, including complaints data, behavioural outcomes such as uptake and dropout rates, customer feedback and surveys, assessments of consumer understanding, and independent audits or peer reviews.

• In response, the FCA has confirmed that it will take a supervisory‑led, proportionate approach rather than mandating specific outcomes or metrics. Within the first year after the targeted support gateway opens in March 2026, the FCA will periodically collect data from authorised firms to monitor market development and inform supervision. Firms should be prepared to generate data on customer uptake, opt‑outs, progression with ready‑made suggestions, the types of actions and products suggested, complaints, referrals to guidance or advice, and assessments of fair value. A formal post‑implementation review will be carried out within two years, drawing on regulatory returns, targeted data requests and wider sources such as the Financial Lives survey. Ultimately, firms will remain responsible for identifying appropriate data to monitor customer outcomes and for maintaining adequate records to support both supervision and future evaluations of the regime’s effectiveness. Firms will need to ensure these record document the “better position” created for the relevant consumer groups.

NEXT STEPS

• The FCA’s consultation on targeted support under PS25/22 closed on 29 August 2025, with near‑final rules published on 11 December 2025 and confirmed as final on 26 February 2026. The new regime is set to take effect from 6 April 2026, with the FCA’s authorisations gateway due to be open during March 2026 for firms to apply for the necessary variations of permission. 

• Burges Salmon is well placed to advise on all aspects of DC pensions and decumulation issues. In our team, Madeleine Chambers, Mamunul Wahid, Suzanne Padmore, Hannah Miller, Heather Musk and Beth Jewell have been considering the impact of targeted support for trust-based pension schemes.  If you would like to explore this topic further, please contact your usual Burges Salmon contact, any of the above, or Suzanne Padmore or Susannah Young.