If you’ve ever logged into a pension platform and felt the suggestions were a little vague, “consider your options,” “you may wish to take advice”, there’s a reason. Until 6 April 2026, UK platforms had to choose between giving you full regulated advice (which requires a fee, a fact-find, and a tailored recommendation) and giving you general guidance (which is not allowed to take account of your specific situation at all). There was no middle ground. From 6 April 2026, there is. The FCA’s new targeted support regime, set out in Policy Statement PS25/22, creates a new permitted activity that sits between guidance and advice, and it is already changing what your pension provider can say to you.
This is one of the biggest changes to retail financial services regulation in a decade. Most of the practical impact will land for pension drawdown customers, but it covers investments more broadly. Here is what targeted support is, what it isn’t, and what to expect when your platform starts using it.
The short version
- The FCA’s targeted support regime came into force on 6 April 2026 under Policy Statement PS25/22. It is a new FCA-regulated activity, sitting between general guidance and full regulated advice.
- Under targeted support, a firm can identify a group of customers sharing similar characteristics (for example, “drawdown customers aged 55-64 holding more than 30% in cash”) and send that group a tailored suggestion, without each customer paying for advice or getting an individualised fact-find.
- The new framework was created largely in response to the FCA’s concern that millions of pension drawdown customers were making sub-optimal decisions without access to affordable advice. UK savers withdrew £18.6 billion in flexible pension payments in 2024/25. 349,992 plans went into drawdown that year; only 88,430 were used to buy an annuity.
- Firms need a specific permission to deliver targeted support. The FCA opened its pre-application support service on 2 March 2026.
- Targeted support is not full advice. It does not produce a personal recommendation tailored to you alone, it does not give you access to the Financial Ombudsman complaint route for advice (it is treated as a separate activity), and it does not protect you from making a poor decision in your specific circumstances if those circumstances are different from the group profile.
- If you want a personal recommendation based on a fact-find of your circumstances, you still need to pay for full regulated advice from an FCA-authorised adviser.
Why the FCA created this new regime
The structure of UK retail financial services has, for over a decade, had a recognisable gap. On one side: regulated advice, available from FCA-authorised advisers, which produces a personal recommendation tailored to your circumstances. The protections are substantial, Financial Ombudsman complaint route, Financial Services Compensation Scheme cover up to £85,000, professional indemnity insurance, but so is the cost. Advisers commonly charge between £1,500 and £3,000 for a one-off pension review, or 0.5% to 1% a year for ongoing service.
On the other side: general guidance from platforms, MoneyHelper, or providers’ own marketing literature. This information is free but tightly bounded, it cannot take account of your personal situation, it cannot lead the customer to a specific product choice, and the regulator has been historically strict about where it draws the “advice line.”
The advice gap, as it became known, affected an estimated 11.5 million UK adults, people whose financial decisions were significant enough to benefit from tailored input but whose situation did not justify the cost of paid advice. Drawdown customers were the largest sub-group: the post-2015 pension freedoms generated millions of pots being managed flexibly, with most savers neither paying for advice nor making active product choices.
Targeted support is the FCA’s structural answer. By creating a new permitted activity defined in regulation, the regulator has given firms a way to make practical, useful suggestions to customers without crossing the line into regulated advice.
How targeted support actually works
A firm offering targeted support does four things.
- Identifies a customer group by a set of objective criteria (age, account balance, product mix, transaction patterns).
- Identifies a problem or opportunity that the group shares (e.g. “high cash holdings inconsistent with stated investment time horizon”).
- Designs a “suggestion”, a specific course of action that the firm reasonably believes would deliver better outcomes for most members of the group.
- Communicates the suggestion to the group, typically through the platform interface, an in-app prompt or a direct email, with clear disclosure that this is targeted support, not personal advice.
What targeted support cannot do is identify whether the suggestion is right for you specifically. The disclosure to customers must make clear that the firm has not assessed individual circumstances, that the suggestion may not be appropriate for some recipients, and that full regulated advice is the route for personalised recommendations.
What this might look like in practice
Some plausible early uses of targeted support, based on FCA worked examples in PS25/22 and industry commentary since publication:
Drawdown cash drag
A platform identifies 25,000 drawdown customers aged under 65 who hold more than 40% of their pot in cash with a stated 10-year-plus retirement horizon. Targeted support: “Customers in your situation may want to consider whether their current cash allocation is consistent with their retirement plans. Returns on cash over 10 years are typically lower than on a diversified portfolio. Here are some options on our platform for reviewing your asset mix.”
Drawdown rate sustainability
A platform identifies drawdown customers aged 60-68 who are withdrawing more than 6% of their pot per year and have no other identified income source on the platform. Targeted support: “Customers with your withdrawal pattern may want to consider whether their current rate is sustainable across a typical retirement length. The ‘safe’ withdrawal rate often cited in retirement planning is 3.5% to 4%.”
ISA-to-SIPP optimisation
A platform identifies higher-rate-taxpayer customers contributing to a Stocks & Shares ISA but not making use of their pension annual allowance. Targeted support: “Higher-rate taxpayers in your situation may find pension contributions more tax-efficient than ISA contributions for long-term savings, because of the higher-rate tax relief.”
Investment platform consolidation
A platform identifies customers paying ongoing advice charges that, based on the firm’s data, do not appear to correspond to active advice being delivered. Targeted support: “Customers in your situation may want to check whether they are still receiving the advice service they are paying for. The charge appears on your account statement.”
None of these examples is a personal recommendation. Each is a nudge based on group characteristics that the firm reasonably believes warrant the customer’s attention.
The scale of the problem targeted support is designed to address
The numbers underlying the FCA’s case for the regime are striking:
- £18.6 billion withdrawn in flexible pension payments in 2024/25, up from £15.3 billion the year before.
- 349,992 pension plans entered drawdown in 2024/25; 88,430 were used to buy an annuity. The roughly 4-to-1 split reflects the long shift in retirement decisions since the 2015 pension freedoms.
- An estimated 11.5 million UK adults sit in the “advice gap”, financial decisions that warrant tailored input, no realistic route to paid advice.
- FCA research has identified persistent high cash holdings, sub-optimal withdrawal rates, and platform-charge mismatch as the three most common drawdown issues that group-level intervention could address.
What it doesn’t change
The targeted support regime is a meaningful addition to the regulatory toolbox; it is not a substitute for personal financial planning.
Not a personal recommendation
A targeted support communication is not a recommendation tailored to your specific circumstances. If you accept the firm’s suggestion and act on it, you do so on the basis that you, the customer, have decided it applies to you. The firm has not assessed your full position.
Different complaint route
Complaints about targeted support can be made to firms and, where unresolved, escalated to the Financial Ombudsman Service. But the test the FOS will apply is whether the firm carried out targeted support in line with the regulatory framework, not whether the suggestion was right for your individual situation. That is a different (and narrower) protection than the one that applies to regulated advice.
FSCS cover
FSCS cover for failed firms applies in line with the relevant category of business. Targeted support is a regulated activity, but its FSCS treatment may differ from full personal advice. Check the FSCS protection rules for the specific firm and product.
Doesn’t replace paid advice for complex situations
Anything that requires a holistic view of your whole financial situation, multiple pension pots, mixed tax circumstances, divorce or bereavement, business interests, large estate planning, is still in personal-advice territory. Targeted support is calibrated for situations where group-level analysis can plausibly produce a useful suggestion for most members of the group.
How to use targeted support sensibly when it arrives
When your platform starts using targeted support, and they all will, in the next 6 to 18 months, the practical points to keep in mind:
- Read the disclosure carefully. The firm has to tell you it is providing targeted support and that the suggestion is based on group characteristics, not your individual situation.
- Ask yourself whether the group description fits. If the suggestion is for “drawdown customers under 65 with more than 30% in cash,” check that you actually match the profile. If you don’t, the suggestion may not apply.
- Consider whether your circumstances make you different from the group. A high cash holding might be a problem for most under-65 drawdown customers but be entirely appropriate for you if you have a guaranteed income source elsewhere, a near-term planned purchase, or a specific risk tolerance.
- Don’t treat it as a substitute for advice on big decisions. Annuity-vs-drawdown, transferring a defined benefit pension, taking a tax-free lump sum, or restructuring your retirement income are personal-advice territory.
- Use targeted support as a prompt to review. The genuine value of the regime is that it can flag issues you might otherwise miss. If your platform tells you the firm has concerns about your drawdown rate, that is a reason to look, even if the eventual answer is “I am fine.”
How this fits the wider regulatory picture
Targeted support is part of the FCA’s broader programme of post-Consumer-Duty regulatory change. Each of these workstreams interacts with the others.
- Consumer Duty, in force since July 2023, requires firms to deliver good outcomes for retail customers. Targeted support is one of the tools firms can use to evidence outcome-focused engagement.
- Advice Guidance Boundary Review, the wider FCA programme of which targeted support is the first major deliverable. Further changes are expected through 2026 and 2027.
- The FCA bereavement review of investment firms (announced 13 May 2026) sits alongside this work. Targeted support can be a sensible tool for proactive engagement with customer groups at risk of poor outcomes; that arguably includes bereaved customers identified through the firm’s vulnerable-customer flag.
- Frontier AI cyber resilience joint statement from the FCA, Bank of England and HM Treasury (15 May 2026) raised the bar on the technology and governance firms need behind any customer-engagement engine. Targeted support tools, which by definition involve automated identification of customer groups, sit squarely within that scope.
- The 2027 pension inheritance tax regime will affect how platforms communicate with personal representatives. Targeted support is a plausible tool for engaging customer groups who may benefit from estate planning attention in 2026 and 2027 ahead of the April 2027 change.
FAQ
Is targeted support the same as financial advice?
No. Targeted support is a new FCA-regulated activity, sitting between general guidance and full regulated advice. Personal recommendations tailored to your individual circumstances still require full regulated advice from an FCA-authorised adviser.
Do I have to pay for targeted support?
Firms can offer targeted support free of charge or charge for it. The regulatory framework permits either. Most platforms are expected to offer initial targeted support without charge, as part of the value proposition of holding accounts with the firm.
Can I refuse to receive targeted support communications?
Yes. Targeted support is delivered to customer groups but you have the right under data protection law to opt out of receiving the communications. The firm cannot withdraw your access to its products based on that decision alone.
What happens if I follow a targeted support suggestion and it turns out to be wrong for me?
Targeted support comes with a clear regulatory disclosure that the firm has not assessed your individual circumstances. If you accept the suggestion, you do so on the basis that you have considered whether it fits. Complaints about targeted support are tested against whether the firm operated the regime correctly, not against whether the suggestion was right for your specific situation. For complex decisions or where your situation differs from the typical group profile, full personal advice remains the appropriate route.
When will my platform start offering this?
Firms need a specific FCA permission to deliver targeted support. The FCA opened its pre-application support service on 2 March 2026, and applications themselves have been open since 6 April 2026. Most major platforms are expected to roll out targeted support in tranches across 2026 and 2027.
Does this affect my self-invested personal pension (SIPP) decisions?
SIPP customers, particularly those in drawdown, are one of the most obvious early targets of targeted support. The FCA’s worked examples lean heavily on drawdown sustainability and asset allocation patterns. If you hold a SIPP, expect to see targeted support communications from your platform within the next 6 to 18 months.
Where can I get free, impartial pension guidance instead?
MoneyHelper (the Government-backed guidance service) and Pension Wise (free pension guidance for people aged 50 and over with a defined contribution pension) provide free, impartial guidance. They do not give personal recommendations but they are a useful complement to anything your platform tells you.
Where to go from here
- FCA Policy Statement PS25/22 (targeted support): fca.org.uk – PS25/22
- FCA Advice Guidance Boundary Review: fca.org.uk – AGBR
- FCA Consumer Duty: fca.org.uk/firms/consumer-duty
- MoneyHelper pensions and retirement: moneyhelper.org.uk
- Pension Wise: moneyhelper.org.uk/pension-wise
- Related Savvy Investor Guide reading: ISA vs SIPP: The complete 2026/27 UK comparison guide
This article explains the FCA’s targeted support regime under Policy Statement PS25/22, in force from 6 April 2026. It is general information, not personal advice. For a recommendation tailored to your circumstances, speak to a qualified, FCA-authorised financial adviser.
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