New FCA ‘Targeted Support’ rules explained: Will your bank soon tell you where to invest?

The financial landscape for UK savers is set for a major shake-up, as the Financial Conduct Authority (FCA) has confirmed the introduction of a new 'Targeted Support' scheme. The initiative is expected to provide additional support for investments and pensions, reaching at least 18 million people over the next decade.

Targeted support will allow financial firms - including banks, investment platforms, and pension providers - to make specific suggestions to consumers to help them make better-informed decisions about their money. The move is designed to narrow the significant advice gap in the UK, where complex financial decisions often leave consumers feeling overwhelmed and unsure of where to turn for help.

Why is it needed?

The new framework is a direct response to the general lack of engagement with regulated advice among the British public. The FCA reports that fewer than one in ten people obtain regulated financial advice. In contrast, nearly one in five turn to family, friends, or social media for help with financial decisions. This lack of professional guidance has significant real-world consequences. Data from the FCA suggests that around seven million adults in the UK with at least £10,000 in cash savings could be missing out on the potential benefits of investing.

Yvonne Braun, director of policy at the Association of British Insurers, said that the new rules are a "significant step towards closing the advice gap and will empower millions".

What is 'targeted support'?

Targeted support aims to be a practical middle ground between impartial, factual information and expensive, in-depth individual financial advice. The FCA describes it as a 'flexible and future-proof framework underpinned by the Consumer Duty'. Ultimately, it should enable firms to innovate and better support their customers. Under existing rules, firms often hold back from offering any kind of financial guidance. This is because they risk straying into the realm of regulated 'financial advice', which legally requires a detailed and costly assessment of a customer's financial situation. Targeted support changes this by allowing:

• Group-based suggestions - Firms will make recommendations based on what is suitable for a segment of customers who share similar characteristics, rather than an in-depth assessment of an individual’s personal circumstances. A further statement issued jointly by the FCA and FOS (The Financial Ombudsman Service) clarified that firms must not provide a suggestion if they are aware of information indicating it would be unsuitable for a specific individual.
• The 'better position' test - The regulator mandates that firms must only offer support when they have "reasonable grounds" to believe it will lead to a better outcome for the customer, compared to not providing the support. This ensures firms genuinely support consumers rather than simply promoting their products.

How will it work?

Instead of simply warning a customer that they are not saving enough, they could instead offer guidance suggesting an alternative pension contribution rate. Alternatively, a customer holding excess cash might be given some specific investment options to consider.

Sarah Pritchard, deputy chief executive of the FCA, stated that the intention is to "build greater confidence to invest", as the UK population invests less than in the EU or US, meaning people "could be missing out on the potential benefits of investing in the medium to long term”.

What is the timeline and how are customers protected?

The new scheme is expected to go live from April 2026, but it currently hinges on a key legal step. The government must introduce new legislation to officially create 'Targeted Support' as a regulated activity. To ensure consumer safety, the FCA has built in strict safeguards:

• Legislation to be finalised - The Treasury has published draft laws to update the Regulated Activities Order. This legislation must be passed by Parliament before the FCA can formally finalise its rules. Until then, the rules published by the regulator are technically "near-final," though they are unlikely to change significantly.
• Firms must be authorised - Firms can apply to offer targeted support from March 2026. Those offering the service will need to show they are ready and meet certain criteria, including holding an absolute minimum regulatory capital of at least £500,000.
• Consumer redress - Crucially, customers who have complaints about the support they receive will have the right to take their dispute to the FOS.

Will customers be charged?

The good news is that the FCA expects most firms to offer this targeted support free of charge. This is a major difference from full, personalised financial advice, which can be costly. Beyond just offering support, the regulator is also planning to overhaul the confusing documents that often come with investment products. The goal is to encourage 'informed risk-taking' - in other words, helping consumers understand exactly what they are investing in and the risks involved, rather than being left to read complex documents with confusing jargon.

As part of this, the FCA plans to draw a clearer distinction between 'everyday' investors and experienced professionals, ensuring that regular savers always get the highest level of protection and the clearest information.

How to get free advice now

While the new targeted support rules will eventually make it easier to get guidance from your bank or provider, you don't have to wait until 2026 to get help with your finances. If you are unsure about your financial situation or need personalised advice right now, there are already several ways to get support for free.

• Book a free financial review - Money to the Masses has partnered with Unbiased to help you get a free initial consultation with a qualified, FCA-regulated financial adviser. This review is free, without obligation, and can help you discuss your financial situation and identify what steps you should take next. Book your free financial review here.
• Free Guidance Services - There are also a number of government-backed and charitable services that offer free guidance on money, debt, and pensions, such as MoneyHelper and Citizens Advice.

For a full breakdown of all the best places to find support, read our comprehensive guide on Where to get free financial advice.