The regulator is considering ways to raise the amount of compensation that can be awarded by the Financial Services Compensation Scheme (FSCS) to better protect consumers in the wake of the pension freedom reforms.
In its FSCS funding review, out on 14 December, the Financial Conduct Authority (FCA) said it was keen to overcome "potential issues" in the differential limits awarded on life insurance and investment contracts. Under current rules, consumers who invests via a life insurance contract, such as an annuity, will receive 100% of their money back if the provider firm fails. A consumer who makes a non-insurance investment, such as drawdown, however, can only receive a maximum of £50,000 per failed firm. Investment-based products such as drawdown surged in popularity following the governmen...
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