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UK pension rule changes do not apply in a specific case

written by Bella Palmer

The FCA has issued guidance on what rules have been changed and one in particular has far reaching ramifications

Coronavirus has impacted a whole host of regulations and rules in recent weeks. The FCA has issued guidance on what rules have been changed and one in particular has far reaching ramifications.

The virus has forced various institutions to change how they do things as physical meetings became unrealistic. One clarification from the FCA has a number of broad impacts on how various industries conduct themselves.

Recently, the FCA clarified rules concerning “wet signatures”; the physical signing of certain documents.

Many industries and areas of wealth management require a lot of paperwork, making it understandable that some organisations could feel unsure of where they stand.

Physical meetings are actively discouraged at the moment, meaning it will be hard to get important signatures or other processing documents from clientele.

Thankfully, the industries and consumers involved should be relieved by recent clarifications from the regulator.

Last week, the regulator detailed that wet signatures are not strictly needed for agreements or forms and that electronic signatures can be appropriate.

They confirmed the following in an announcement: “Agreements: Our rules do not explicitly require wet-ink signatures in agreements, nor do they prevent firms from using electronic signatures in agreements. The validity of electronic signatures is a matter of law. Firms should consider the legal position themselves because we cannot give legal advice.

Forms: We have recently stated that we would accept electronic signatures for fund-related applications and on all applications from mutual societies. We confirm that firms may use electronic signatures for all interactions with us.

These statements should make things easier but they did highlight that there could be an issue with the law in some instances.

Unfortunately, one of the areas that could still see difficulty is one that is already struggling at the moment.

Pensions require a lot of management and due diligence from both the holders and the managers.

Deeds can be a big part of pension planning and, unfortunately, these are documents which still require a wet signature.

Penny Cogher, a Pensions Partner at Irwin Mitchell, commented on this: It is perfectly possible to enter into many documents and agreements with just an electronic signature of some type or other agreed form of response so it is pleasing to see the FCA formally relax its rules on wet signatures. However wet signatures are still needed for deeds and this was fairly recently confirmed by the Law Commission. This is a problem as deeds are still used in a lot of non–standard pension matters.


Penny provided advice on the options available for people who find themselves in this predicament: To work round this, when we draft deeds, we draft them so that only one director’s signature is needed in the execution clause on a company’s execution of the deed. This works as long as this is witnessed.

The latest view, in the current circumstances, is that, although not ideal, a family member can be a witness for the company’s execution of the deed.

It is still not possible to be a witness through video conferencing. For individuals to execute a deed, an independent witness is still required, but the execution process could be gone through outside with the main party and the witness still socially distancing.

Penny went on to detail that there are three main instances where a deed would be needed: when a pension trustee needs to be changed, to change the company that runs a pension scheme or to change the benefits provided by a pension scheme.


The opinions expressed by our writers are their own and do not represent the views of UK Investment Guides. The information provided on UK Investment Guides is intended for informational purposes only. UK Investment Guides is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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