Proposals to implement “targeted support”, to improve the availability and affordability of help with financial decisions, have been set out by the Treasury and the Financial Conduct Authority (FCA).
The policy note, published yesterday by the Treasury, outlines proposed changes to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
People most likely to benefit from the new form of support are those with significant savings held in cash who do not invest it, for example because of concerns about the risk of losing their money.
Under the proposals firms providing targeted support will be subject to bespoke conduct standards distinct from the requirements that apply to ‘advising on investments’.
Firms will need to apply to the FCA or the PRA to provide targeted support.
The Treasury has invited comments on the draft statutory instrument by 29 August 2025.
Further detail on conduct standards are set out in the FCA’s consultation on draft rules for targeted support.
The government also encouraged stakeholders to respond to the FCA’s consultation on the draft rules for targeted support by 29 August 2025.
Steven Cameron, pensions director at Aegon, welcomed the publication of the plans to create a new regulated service for customers seeking help with pensions and investments.
“This comes alongside the chancellor’s decision to defer any limit on the amount which can be paid into a cash ISA each year, which would have complicated the ISA regime without necessarily encouraging more savers to invest.
“Many customers may not have the best balance between cash savings and stocks and shares investments. For those who don’t seek advice, targeted support will equip more to make the right decisions for themselves. This includes understanding the benefits of moving excess cash into a stocks and shares ISA, potentially benefitting from much higher returns, albeit at the expense of the ‘no loss’ security of cash savings.
“The government and the financial regulator, the FCA, have been working with the industry on this for some time. From next April, banks, building societies, pensions and investment firms can seek authorisation to offer the new, and likely free, ‘targeted support’ service. This will sit somewhere between the current options of general information/guidance and full financial advice. Unlike full advice, it won’t involve a personalised recommendation based on each individual’s full circumstances. Instead, firms may reach out to customers offering suggested actions to groups of people sharing common characteristics.”
Cameron said the changes will help the 7 million individuals with more than £10,000 in ‘investable assets’ held solely in cash, who have not yet taken up advice.
“Many of those who are prepared to take some investment risk and have no short term need for their funds might get a better return on their money by investing some of it in a stocks and shares ISA.”
He added: “The government is also hoping that some of the money invested will go into UK companies, helping boost UK economic growth.
“As well as offering suggestions around investing ‘excess’ cash, targeted support may be used to suggest contributing more to a pension for an adequate income in retirement, or to support choosing between different retirement income options.
“The publication from the Treasury brings targeted support one step closer to reality.”
Jonathan Watts-Lay, director at Wealth at Work, said: This news has been welcomed by many, but we believe further consideration is necessary to ensure the right support is provided to help all individuals.”
Recent research from Wealth at Work found that 42 percent of workers are worried about not having enough savings for unexpected costs. But there is an appetite for saving as the survey found that if people had spare cash, more than two-fifths (42 percent) would save it for a rainy day, perhaps putting it in an ISA.
Employers recognise the need to help their employees with their future savings. Research conducted by Reba found that the number of employers that will offer savings via tax-free wrappers including workplace ISAs is set to grow by 114 percent.
Watts-Lay said: “Many people don’t know where to start when investing and often can’t access advice either due to cost or insufficient monies to invest. Targeted support may help savers to get started out and could be helpful to bridge the advice gap. Not only this but targeted support could be a great way to help disengaged investors make active choices and get better value from their investments.”
He said targeted support could play a key role in helping people plan ahead and understand if they are saving enough for the future they want. The regime could improve pensions engagement and increase contributions.
“Not only this, but it could help people to understand what is required to generate a desired level of income throughout retirement.”
But he said: “By design, targeted support is not holistic and therefore will not consider all of someone’s accumulated wealth as well as their personal circumstances and needs. So, for many with larger sums of money, regulated advice will still remain the best option, especially when planning for retirement or considering retirement income options as this can be complex. Therefore, targeted support may not be a solution for everyone, although it could possibly offer a gateway to advice for some.”
Watts-Lay highlighted concerns that targeted support could mean targeted sales, adding that this means consumer protection is key.
“We look forward to reviewing the regulatory framework because, as ever, the devil will be in the detail,” he said.
Another challenge will be to achieve the balance between consumer protection and regulation.
Watts-Lay said that if regulation is too stringent few firms may sign-up to offer the service, while if it is too lax there could be issues around potential mis-selling.
“The definitions of how the characteristics define the solutions are key and could become a legal minefield which pension trustees may be uncomfortable with.”
