FCA proposes new standards for non‑advised DC‑to‑DC pension transfers
On 11 December 2025 the FCA published CP25/39 setting out its proposals on certain areas of the regulatory framework for Defined Contribution (DC) pensions discussed in its December 2024 Discussion Paper (DP 24/3), including revealing its proposals for new mandatory standards which would apply to non-advised DC-to-DC pensions transfers.
The proposals are a significant development for all FCA-regulated pensions providers and intermediaries dealing with non-advised pension transfers, including dedicated pensions consolidator firms.
What is the core proposal?
The proposals would place obligations on both engaging firms (firms that promote and offer non-advised transfers or consolidation) and ceding firms (operators or providers of ceding schemes).
Engaging firms must not offer the facility to instruct a pension transfer to a non-advised customer unless they have first been presented with prescribed information necessary to compare the receiving and ceding schemes and allow them to make an informed decision about whether to transfer or consolidate. The proposal involves following a structured three‑step process before any transfer instruction can be made:
- securing the consumer’s written consent solely to gather information;
- sending a standardised information request to potential ceding firms; and
- replaying ceding and receiving scheme information back to the consumer in a way that supports the consumer comparing the schemes and weighing up the risk and benefits of any transfer.
Ceding firms will be required to acknowledge and respond to information requests from engaging firms within mandatory timelines, in the form and with the level of detail required by the rules.
Scope and trigger
The regime would apply to non‑advised DC-to-DC transfers involving FCA‑regulated pensions. It is triggered when an engaging firm becomes aware that a non‑advised client is considering a transfer to a proposed receiving scheme. This expressly includes where a consumer opens a new pensions product for the purposes of receiving transfers into it from other schemes even if a specific transfer is not yet contemplated.
Deferred pension pots below the small pots threshold for the purpose of small pot consolidation measures (currently £1,000) are generally excluded from the mandatory scope of the proposals but providers can opt in.
Step 1: Capturing Consent - required disclosures and a standalone step
When the regime is triggered, engaging firms will have to obtain customer consent in writing to gather information from potential ceding firms. At this point they will be required to explain to consumers that: transferring a pension is a significant decision with long-term financial implications; whether a transfer is suitable will depend on individual circumstances and objectives; and not all pensions are the same and some features and benefits may be lost on transfer. They will also have to signpost that there are certain matters the consumer can consider and compare to decide if they’re likely to be better or worse off after transferring, and that the engaging provider can request that information directly from the ceding schemes on the consumer’s behalf.
If a consumer opts out and does not want the engaging firm to gather information for it, the engaging firm must warn the consumer about the risk of losing valuable benefits and that proceeding without comparing features of the ceding and receiving schemes may result in poorer outcomes.
Engaging firms will not be allowed to ‘bundle’ consent to gather information and consent to transfer any arrangements or take any other action on behalf of the customer. They will only be allowed to make available the facility to instruct a transfer after the required information has been provided, or the customer has opted out.
Step 2: Gathering information - standardised information requests and prompt responses
Engaging firms will have to use a single, standardised FCA-template information request to request information from potential ceding schemes.
Ceding firms must acknowledge receipt of engaging firms’ information requests within 2 business days and return the completed template within 10 business days.
Step 3: Information to be replayed to consumers
Once step 2 has been completed, engaging firms must collate the information received with information about the receiving scheme and present it back to the consumer in a way that supports consumers making meaningful comparisons. The information to be captured and presented back covers a detailed prescribed list of benefits and features about both the ceding scheme and the receiving scheme, as well as requirements on how the information should be presented.
Engaging firms will also have to provide risk warnings that include calling out where valuable features of a ceding scheme would be lost on transfer, and signpost consumers to MoneyHelper.
Engaging firms must present all ceding‑scheme responses alongside comparable receiving‑scheme information within 3 business days of receiving all responses or of the 10‑day deadline expiring, whichever is earlier.
Restriction on charging in relation to complying with the rules
The FCA’s draft rules include an express restriction on firms charging a non-advised client in relation to compliance with the proposed rules. This is an unusual step from the FCA and as there is no additional guidance in the consultation paper on why this has been included in relation to these proposed rules in particular, it is unclear why the FCA is seeking to single out the cost of compliance with these rules as opposed to firms’ general compliance costs.
Next steps
Feedback can be submitted to the FCA until 12 February 2026. The FCA aims to publish a policy statement and final Handbook text in the latter half of 2026. All types of firms involved in DC pensions transfers could benefit from reviewing the detailed proposals and feeding back to the FCA, in particular on some of the operational points it calls for ideas from firms on, for example how digital solutions could support more streamlined consent gathering across the industry.
If your firm would like to discuss any aspect of the proposals with CMS please reach out to one of the key contacts above.
