Major update for people with bank accounts and pensions announced

Millions of savers, pensioners and bank customers are set to receive free, personalised money tips under "once-in-a-generation" reforms.

In a major shift, financial firms including banks, pension providers and investment platforms will be allowed to offer customers direct "ready-made suggestions" on managing their money - even if they haven't asked for it.

The Financial Conduct Authority (FCA) says the changes are designed to plug a gaping "advice gap" that has left millions facing major financial decisions without proper help, including how much to save for retirement or which funds offer better value.

Currently, strict rules prevent firms from offering anything beyond generic guidance unless a customer has signed up - and paid - for full-blown financial advice.

But under the new "targeted support" regime, firms will be able to nudge people with tailored suggestions, without breaching regulations.

The shift could benefit anyone with a pension or savings account, with consumer-facing organisations like Pension Wise and Citizens Advice expected to play a role in supporting those confused by the guidance.

Sarah Pritchard, executive director at the FCA, described the overhaul as "once-in-a-generation reforms that will help people navigate their financial lives and give them greater confidence to invest. This is a win-win for consumers and firms alike."

Just 9% of adults currently receive authorised financial advice, with many priced out due to the high costs - typically 1-3% upfront and around 2% in ongoing annual fees. The FCA is targeting the estimated seven million people with over £10,000 sitting in cash savings who could be earning better returns elsewhere but are too unsure to act.

Warnings over TikTok advice and AI-driven investing

The reforms come amid growing concern about the rise of "finfluencers" offering often dubious financial guidance on social media platforms.

James Carter, head of platform policy at Fidelity International, said: "That could result in poor financial decisions. I'm beginning to hear more and stories of people using ChatGPT to make conclusive decisions about their financial futures."

Consumer groups have broadly welcomed the FCA's move but are urging caution to prevent another mis-selling scandal. While the advice will stop short of full personal recommendations, campaigners stress the need for clear safeguards and transparency.

Yvonne Braun, director of long-term savings policy at the Association of British Insurers, said: "We know facing complex financial decisions can feel overwhelming, especially in retirement. The FCA's decision to press ahead with this crucial proposal is very welcome and should be a relief to millions of savers."

How the support will work

The FCA outlined how firms could use targeted support to suggest:

Higher pension contributions if savers are at risk of underfunding retirement.

Cheaper investment funds to customers stuck in poor-value products.

Sustainable withdrawal rates for pensioners drawing down too quickly.

The support will apply to groups of customers with similar traits, such as age or savings behaviour, rather than individuals. Firms will need special permissions to offer such guidance and must avoid giving full personal recommendations.

Steven Levin, chief executive of wealth firm Quilter, said: "The scale of the problem is stark.

"Just 9% of adults received regulated financial advice last year, despite millions holding investible assets... Targeted support could deliver scalable, structured help to consumer groups with shared characteristics."

The reforms could also be followed by changes to "simplified advice", which would allow stripped-back personal recommendations at lower cost - potentially for those wanting to invest a lump sum or change pension contributions.

What happens next

The FCA's consultation on the targeted support regime runs until August 29, with the final policy statement due in December. If the plan is approved, the first customer guidance messages could roll out from April 2026.

Among the firms already testing the approach is investment platform AJ Bell, which ran a trial earlier this year.

Tom Selby, public policy director at AJ Bell, said: "Millions of people who don't take regulated advice are essentially left to make often complex retirement decisions on an island, without receiving the help they require.

"The proposal to create a new 'targeted support' regime could be a gamechanger."

It remains to be seen whether the reforms will be enough to close the advice gap fully - or win over sceptical investors.