Pension Switching Reports in 2026: What Advisers Must Evidence Under FCA Expectations
Pension switching continues to be one of the most scrutinised areas of retail investment advice in the UK. Suitability reports remain the main way the FCA determines whether a recommendation was well-reasoned and in the client’s interest. The regulator’s stance has not softened. File reviewers still expect a clear explanation of the client’s objectives, a full analysis of the existing and proposed schemes, a transparent comparison, and a record of all alternatives considered.
Advisers must evidence suitability with specific, client-centred reasoning and measurable data. This article consolidates the key requirements and shows how Automwrite supports advisers in meeting them.
Why Pension Switching Reports Still Matter
The FSA’s pension-switching assessment template is still a reference point for how suitability is judged. Reviewers are instructed to “objectively assess all the facts to decide whether the adviser’s recommendation is suitable” and to note that disclosure alone cannot turn unsuitable advice into suitable advice.
The framework identifies four unsuitable outcomes that continue to shape FCA expectations today:
- Switching to a more expensive pension without good reason.
- Losing guarantees without justification.
- Recommending investments that do not match the client’s risk profile.
- Failing to explain the need for ongoing reviews.
These outcomes are important because they show what must appear in a pension switching suitability report for it to stand up to scrutiny.
What a Strong Pension Switching Suitability Report Includes
The FSA template provides a clear structure for what advisers need to document. Although created in 2009, its expectations are aligned with the FCA’s current supervisory priorities and Consumer Duty.
Client objectives recorded in plain language
Reviewers check whether the adviser has captured the client’s stated needs and whether those needs appear genuine. The FSA notes that if the right advice is not to switch, the adviser must say so—even if the client initially requested a move.
Detailed assessment of the existing pension
This includes charges, guarantees, investment range, penalties, performance, administration issues and projected values. The template’s data section requires a full breakdown of ceding plans, including guaranteed annuity rates and any transfer penalties.
Assessment of the receiving scheme
The proposed plan must be analysed with equal depth, covering product charges, investment strategies, flexibility, non-fund charges and fund-level fees.
A factual, measurable comparison
The FSA emphasises that advisers must determine whether the receiving scheme is more expensive than the existing pension or a stakeholder pension. If it is more costly, the reasoning must be clear and client-specific. The guidance states that “clear disclosure of additional charges on the receiving scheme is not sufficient” and that value must be demonstrated, not assumed.
Guarantees and valuable benefits
If the switch leads to the loss of guaranteed terms, the report must show why the loss is acceptable. If a firm has not checked for guarantees, the template treats it as a serious failing.
Risk alignment
The investment strategy must match the client’s recorded attitude to risk and capacity for loss. The guidance notes that time horizon and wider portfolio composition must also be considered.
Ongoing reviews
If the client requires periodic rebalancing or monitoring, the suitability report must explain the purpose of future reviews and how they will be delivered.
Transfer Delays and Market Findings
PensionBee’s 2025 data showed that transfer delays remain common. Some firms took 21 to 160 days to complete transfers.¹ The key issues identified were slower processing where schemes relied on manual steps, transfers taking over two months in some cases and inconsistent communication between ceding and receiving providers. These delays make it important for advisers to document reasonable expectations and note any foreseeable impact on the client.
FCA Commentary on Switching and Transfer Times
PensionsAge reported that while the FCA defended general transfer times, it expressed concern about switching incentives and client understanding.² According to the FCA, most ceding schemes processed transfers promptly, more complex cases with additional checks took 26 to 160 days, delays may cause “foreseeable harm” if clients expect faster processing and cash-based switching incentives remain a source of concern. This reinforces the need to document why the switch is appropriate beyond short-term benefits.
New FCA Guidance on DB Transfers
The FCA’s updated consumer guidance on defined benefit transfers (April 2025 update) reinforces long-standing expectations.⁴ The FCA is direct: “The FCA and The Pensions Regulator believe it’s in most people’s best interests to keep their DB pension.” The page clearly states that transfers are irreversible and that clients must understand the risks before making a decision.
Key risks the FCA highlights include: loss of guaranteed lifetime income, reduced certainty for dependants, exposure to investment risk, potential for income to run out, paying more in fees and needing to manage investments themselves.
The FCA also explains who is least suited to a transfer, including clients who rely on their DB scheme for most of their retirement income, who cannot live on a lower income, whose DB benefits already meet their needs and whose goals can be achieved through alternatives such as death-benefit planning.
A transfer may suit clients who have other income sources, limited life expectancy or specific reasons to prioritise benefits for dependants. This material should inform how advisers explain risks and suitability, especially for DB to DC recommendations.
DB Transfer Reporting Moves to an Annual Cycle
In September 2025, the FCA proposed reducing DB transfer activity reporting from half-yearly to annually.³ This change reflects reduced transfer volumes, supervisory interventions tightening the market, the impact of the ban on contingent charging and lower systemic risk. Even with reduced reporting, the FCA emphasised that oversight would remain strong.
Common Weak Points in Pension Switching Advice
FCA reviews continue to find issues such as generic explanations, insufficient cost comparisons, failure to record guarantees, recommending higher-cost schemes without justification, risk mismatches and poor explanation of alternatives. The FSA guidance states that advisers must show why a more expensive product delivers value for the specific client, with no reliance on broad or theoretical arguments.
How Automwrite Supports Pension Switching Reports
Automwrite reduces the administrative workload that usually slows advisers down. The platform supports pension switching and consolidation analysis, including accumulation and decumulation forecasting, cashflow modelling, long-term projections and stress testing.
- It provides pension projections, investment switching analysis, sourcing, projections and switching scenarios.
- It supports transfer analysis including APTA and TVC, suitable for DB transfer cases requiring structured evidence.
- It includes research across more than 50,000 pension and investment funds.
- It generates structured, FCA-aligned suitability reports that pull client details, reasoning and supporting documents directly from meeting notes and uploaded plan information.
Because these functions sit under a single licence, advisers avoid navigating multiple systems to complete sourcing, projections, switching comparisons and final reporting.
Trial Automwrite for Pension Switching Reports Made Simple
Pension switching reports remain one of the most important regulatory documents an adviser produces. Recent transfer research, updated FCA consumer guidance and changes to DB transfer reporting all reinforce the need for clear reasoning, measurable comparisons and accurate risk evaluation. Automwrite supports advisers by consolidating analysis, sourcing, projections and reporting in one place, helping firms evidence suitability in a consistent and efficient way.
FAQ
A pension switching report explains why moving from one pension scheme to another is suitable for a client. It documents objectives, costs, risks, guarantees and the comparison between the existing and proposed schemes.
The FCA expects a clear explanation of the client’s objectives, a full breakdown of the existing pension, analysis of the proposed scheme, and a measurable comparison between the two. Advisers must document charges, guarantees, risks, alternatives considered and why the recommended option is suitable. The reasoning must be specific to the client and demonstrate fair value under Consumer Duty.
Comparisons need to be factual, measurable and based on long-term cost and benefit differences, not headline charges. The FCA expects advisers to quantify charges over time, record any loss of guarantees and explain why a more expensive option is justified. A simple feature-based comparison is not enough. The report should show the client’s position if they stay where they are versus if they transfer.
A DB transfer may be appropriate only when the client does not rely on the guaranteed income, has other secure income sources and understands the risks of moving to investment-based benefits. The FCA notes that most people are better off remaining in their DB scheme because the income is guaranteed and protected against inflation. A transfer requires strong evidence that the client’s needs, preferences and financial position are better served outside the DB environment.
Unsuitable cases often involve weak comparisons, missing cost analysis, failure to check guarantees, recommending a product outside the client’s risk profile or ignoring better value alternatives. Generic language that does not reflect the client’s actual situation is another common issue. The FCA also flags cases where advisers switch clients to a more expensive scheme without a clear, client-specific benefit.
Advisers benefit from using tools that bring analysis, projections, research and reporting into one workflow. Automwrite supports this by handling meeting transcription, follow-up summaries, case analysis, cashflow modelling, APTA, TVC, fund research and FCA-aligned reporting. This reduces manual work while still producing detailed evidence for pension switching reports and DB transfer cases.
Sources
- PensionBee. Transfer delays persist as industry struggles to improve efficiency (2025).
- PensionsAge. FCA defends pension transfer times; concerns over switching incentives persist (2025).
- International Adviser. FCA to reduce DB pension transfer reporting. (2025).
- FCA. Considering a defined benefit pension transfer (2025).
- FSA. Pension-Switching Advice Suitability Assessment Template (2009).
- FSA. Using the FSA’s Pension-Switching Advice Suitability Assessment Template (2009).
Latest Posts
