The Financial Conduct Authority has issued a clear warning to pension providers.
Millions of people holding older unit-linked pension and savings policies may not be receiving fair value.
The scale is remarkable.
Around 17 million policies.
Around £500 billion invested.
Many of these products are no longer sold. They sit quietly in the background, often unchanged for years while newer products have evolved with lower charges, improved investment options and better online services.
According to the FCA, many firms already recognise that customers in these legacy arrangements may be worse off than those entering equivalent products today.
Some firms have already begun reducing charges, simplifying products and helping customers move into better arrangements.
Others have been told they need to do much more.
A Legacy Pension Is Not Necessarily A Bad Pension
This is important.
The FCA is not saying that everyone should transfer their pension.
Far from it.
Many older pensions contain valuable guarantees or contractual rights that could be worth preserving.
Examples include:
- Guaranteed annuity rates
- Protected tax-free cash
- Guaranteed investment returns
- Loyalty bonuses
- Valuable life cover
- Other contractual benefits that are difficult or impossible to replace
Leaving simply because a policy is “old” could be the wrong decision.
Equally, remaining simply because “it’s always been there” could also be the wrong decision.
The right answer begins with understanding.
Most People Don’t Know What They’re Paying For
One of the biggest problems with legacy pensions is that the contracts themselves can be extraordinarily difficult to understand.
Charges may include:
- Annual management charges
- Policy fees
- Fund charges
- Adviser commission
- Platform costs
- Administration deductions
Some are obvious.
Others are buried inside lengthy terms and conditions written years ago.
Many people have never read the contract since the day they signed it.
Before You Decide Anything…
Read the contract.
Understand the charges.
Identify the benefits.
Know what questions to ask.
That is exactly why we built The Leveller™.
Rather than telling you whether to keep or transfer your pension, The Leveller helps you understand what your contract says.
It can explain:
- complicated clauses
- charging structures
- contractual rights
- guarantees
- warning signs
- questions worth asking before making any decision
It helps level the playing field between consumers and complex financial documentation.
Better Decisions Begin With Better Understanding
If your pension genuinely offers poor value, you may wish to explore whether a better alternative exists.
If your existing contract contains valuable guarantees, those may outweigh higher charges.
The important point is this:
Don’t make either decision in the dark.
The FCA is encouraging firms to improve outcomes for customers.
The Academy of Life Planning is helping customers improve outcomes for themselves.
Because restoring human agency starts with understanding the contract you already own.
Before you move your pension—or decide to leave it exactly where it is—make sure you understand the contract you’ve been paying into for years.
Want to know what your pension contract really says?
Visit the Academy OS to explore The Leveller™ and our growing ecosystem of AI-supported tools designed to help people understand, question and navigate important financial decisions with confidence.
The official FCA publication is:
Unit-linked pensions and savings – Multi-firm review of Consumer Duty price and value outcome
It sits within the FCA’s Consumer Duty work programme and sets out what firms are expected to do to improve outcomes for customers.
Some of the key findings are:
- The FCA reviewed unit-linked non-workplace pensions and savings, representing around 17 million policies with approximately £500 billion of assets.
- Around half of the policies examined were in legacy or closed products that are no longer available to new customers.
- Many firms acknowledged that customers in older products may receive poorer value than customers in comparable modern products because of higher charges, weaker investment outcomes or fewer service features.
- The FCA found examples of good practice where firms had:
- reduced charges,
- simplified charging structures,
- preserved valuable guarantees while lowering costs,
- and proactively identified customers who could benefit from moving to newer arrangements.
- The regulator warns that firms must act where they cannot demonstrate fair value and states that it will take supervisory or regulatory action where sufficient progress is not made.
One sentence from the FCA is particularly powerful:
“Consumers in older products should not be left behind.”
For the Academy of Life Planning, I think there’s an even stronger message than “check your contract.”
Millions of people have pension contracts they signed years—or even decades—ago. The FCA is asking providers to review whether those contracts still deliver fair value. Before deciding whether to stay or switch, understand what your contract actually says.
That positions The Leveller™ exactly where it belongs—not as a recommendation engine, but as an understanding engine. It helps people identify charges, guarantees, exit penalties, valuable legacy benefits and important contractual terms before deciding whether to seek advice or consider an alternative. That’s entirely consistent with the Academy’s principle of restoring human agency through understanding.
Academy of Life Planning 