Britain's financial watchdog has announced sweeping changes to investment advice rules that could help millions of people make better decisions about their money, in what it described as the biggest shake-up for more than a decade.

The Financial Conduct Authority said it would allow firms to offer a new type of help called "targeted support", enabling companies to make generic suggestions to groups of consumers with common characteristics. This could include people drawing down on their pensions unsustainably, not saving enough for retirement, or holding excess cash in current accounts.

The reforms aim to bridge the so-called "advice gap" that has left many unable to afford traditional financial advice. Currently, just 9 per cent of adults received financial advice about their pensions or investments in the previous 12 months, according to the FCA's latest Financial Lives survey.

Sarah Pritchard, deputy chief executive of the FCA, said: "We want to help consumers navigate their financial lives and plan for the long term. Some of the most difficult financial decisions we face are how to save, invest and prepare for a comfortable retirement."

The changes come more than 10 years after the FCA's Retail Distribution Review, which aimed to drive up standards but ultimately increased costs and reduced access to advice. About 7 million adults in the UK have £10,000 or more in cash savings and may be missing out on investment benefits.

Of those who did not receive financial advice but hold significant cash savings, 24 per cent said they don't invest because they don't know enough about it, whilst 12 per cent feel overwhelmed by the number of options available.

Chancellor Rachel Reeves welcomed the proposals, saying: "Too many people are missing out on the support they need to build a more secure financial future for themselves and their families. Today's reforms will make a real difference to help working people make better long-term financial decisions."

The FCA also plans to create "simplified advice" that allows firms to make product suggestions based on a quick review of customers' essential facts, without conducting full suitability assessments.

The regulator estimated that some 100 companies would launch targeted support services, many of them for free, with firms able to cross-subsidise costs through other products. According to Barclays, around 13 million UK adults are holding approximately £430 billion in cash that could potentially be invested.

The regulator estimates between 13.5 million and 30.6 million people could benefit from targeted support, with some 100 companies expected to launch such services. The FCA aims to authorise targeted support services from April 2026.

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