The FCA’s Retirement Income Advice Thematic Review (TR24/1, March 2024) made one thing very clear: retirement income advice will remain an ongoing supervisory priority. Reinforced by the accompanying Dear CEO letter, the FCA stressed that this review is not simply “guidance” but a statement of expectations, expectations that will shape regulatory scrutiny in the years ahead.
From Accumulation to Decumulation: A Distinct Shift
A central theme of TR24/1 is the need to draw a clear line between accumulation and decumulation. Too many firms continue to blur the two, despite the FCA warning of the risks. Advice frameworks must adapt to reflect this shift, ensuring suitability in a world where objectives fundamentally change at retirement:
-
From growth to sustainability of income
-
From long-term compounding to sequencing risk management
-
From liquidity being optional to liquidity being essential
-
From wealth accumulation to longevity planning
The Scale of the Opportunity
The opportunity here is significant. Retirement clients now represent nearly 60% of advised assets, and advisers expect this to rise further to 61% within three years (NextWealth, Retirement Advice in the UK: Time for Change? 2024). In other words, retirement advice isn’t just one part of financial planning, it is becoming the dominant driver of client relationships and firm revenues.
Where Firms Are Falling Behind
Yet many firms are struggling to translate this into structured propositions. According to the State of the Advice Nation (SOTAN 2025):
-
45% of advisers say their Centralised Retirement Proposition (CRP®) is identical to their Centralised Investment Proposition (CIP).
-
A further 26% say it is “fairly similar.”
That means nearly three-quarters of firms have not meaningfully differentiated their retirement process, a striking misalignment with the FCA’s expectations.
This lack of distinction often carries through to investment decisions. 52% of advisers continue using the same fund selections at the point of retirement, despite the shift in objectives once decumulation begins.
Withdrawal strategies also remain fragmented:
-
51% use a total-return strategy
-
34% use income-focused solutions
-
41% use a bucket approach
(many employing more than one).
The FCA’s emphasis on personalised withdrawal strategies, scenario modelling, and evidence of fair value makes it clear: simply “tightening documentation” is not enough. Yet over half of firms told NextWealth in late 2024 that no significant changes were needed in response to TR24/1.
The Demographic Drivers
The regulatory focus is not arbitrary—it is rooted in profound demographic shifts:
-
By 2050, over a quarter of the UK population will be aged 65+.
-
The 85+ age group will double to 5%.
-
The Health Foundation projects that by 2040, nearly one in five adults in England will be living with a major illness, an increase of 2.5 million compared with 2019.
This means retirement advice cannot be confined to income solutions. It must account for:
-
Longevity and health risks
-
Client vulnerability
-
Rising complexity of care and intergenerational planning needs
Adviser Pressures
At the same time, advisers face their own constraints:
-
48% cite regulatory time burden
-
47% highlight compliance complexity
-
46% point to rising cost-to-serve (NextWealth 2024)
These pressures are real, but they cannot justify standing still. TR24/1 signals that regulators expect firms to rethink methodology, not just adjust paperwork.
Why This Matters
For firms, the implications are clear: a well-designed Centralised Retirement Proposition® (CRP) is no longer optional, it is essential. Without it, firms risk falling short of Consumer Duty, failing to demonstrate fair value, and ultimately losing the trust of the very clients whose needs are most complex and urgent.
Retirement advice is the industry’s greatest opportunity, but also its greatest test. The question is whether firms will rise to the challenge, or wait until the regulator forces their hand.
Add comment
Comments