Money Covered: The Week That Was – 30 January 2026

Welcome to The Week That Was, a round-up of key events in the financial services sector over the last seven days.

On the fifth episode of Season 4 of our podcast, Money Covered – The Month That Was, Mel is joined by David Allinson to discuss the FCA’s proposed section 404 consumer redress scheme for vehicle finance.

To listen to this and all previous episodes, please click here.

Our latest edition of the Financial Ombudsman Newsletter is out now and can be found here.

Headline development

Guidance issued by the FRC on dealing with historic amendments to pension rules

On 23 January 2026, the Financial Reporting Council (FRC) issued guidance relating to the provision of retrospective confirmation to validate historic changes to pension scheme rules.

The guidance addresses industry-wide concerns following the High Court's judgment in Virgin Media v NTL Pension Trustees. The High Court ruled that, where it could not be evidenced that the required statutory actuarial confirmation under section 37 of the Pension Schemes Act 1993 had been obtained, amendments to a pension scheme could be considered void.

The judgment has raised significant concerns due to the possibility that many schemes may be unable to evidence compliance for historic amendments, leaving them exposed to higher liabilities than expected.

The FRC's guidance seeks to provide actuaries with practical advice on "how to work proportionately when reviewing historic scheme changes". The guidance is aimed towards strengthening both industry and consumer confidence that pension schemes have complied with their legal obligations.

To read more, please click here.

Tax practitioners

HMRC increases focus on second home transactions

HMRC is increasingly scrutinising second home transactions, with Stamp Duty Land Tax (SDLT) investigations increasing by 88% in the 2024/25 financial year.

Figures published by Lubbock Fine show that investigations increased from 1,617 in 2023/24 to 3,035 in 2025. The rise has been linked in part to the increase in the additional SDLT rate on second homes from 3% to 5% in October 2024, which may have incentivised misreporting of transactions. The firm’s director, Graham Caddock, also pointed to the public scrutiny surrounding Angela Rayner’s reported SDLT issues as a likely factor in the uptick in HMRC’s activity.

HMRC investigations have identified buyers attempting to avoid the SDLT second home surcharge through wrongly claiming that they were replacing their main residence, or by transferring their property into a trust or to a partner.

Investigators have also found attempted avoidance of the surcharge through buyers incorrectly claiming that a property includes commercial use. Caddock warned that this position is only valid in specific situations. HMRC is expected to challenge such claims where the commercial use appears incidental or contrived.

To read more, please click here.

Regulated developments for FCA regulated entities

FCA encourages caution following introduction of Public Offers and Admissions to Trading Regulation 2024

On 19 January 2026, the FCA's Public Offers and Admissions to Trading Regulations 2024came into force. The new rules make it easier for companies to raise capital in the UK and reduce costs when admitting securities to UK public markets. Whilst the new rules aim to boost growth and encourage investment, the FCA has urged consumers to exercise caution when considering high risk high reward investments, such as mini bonds and loan notes.

The FCA has emphasised that investment such as these are generally only suitable for experienced investors, who understand the risk and are able to financially withstand potential losses. The FCA has urged investors to exercise caution, to do their own research, and to only engage with regulated firms which afford consumers greater protections.

To read the policy statement, please click here.

To read the FCA's caution for consumers, please click here.

FCA sets out proposals on the application of the FCA Handbook to cryptoasset firms

The FCA has published a second consultation paper (CP26/4) setting out its proposals as to how the FCA Handbook will apply to regulated cryptoasset activities. This follows HM Treasury's presentation of the draft Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025 in December 2025 – the legislation will bring certain cryptoasset activities within the FCA's regulatory remit and require firms and individuals conducting regulated cryptoasset activities to apply for authorisation before carrying such activities by way of business in the UK.

Authorised firms will need to comply with the FCA Handbook, and this has required the regulator to consider and consult on how its rules should apply to cryptoasset firms. In particular, the FCA has considered how the Consumer Duty (the Duty) should be applied to cryptoasset firms. In response to part one of its proposals in September 2025 (CP25/25) 80% of respondents supported applying the Duty alongside sector-specific guidance.

In respect of the application of the Duty, the FCA proposes:

• To apply the Duty (Principle 12 and PRIN 2A) to cryptoasset firms in the same way as it applies generally to all FSMA-authorised firms (including payments firms).
• To apply the duty to all activities carried out in relation to UK-issued qualifying stablecoins, including activities relating to public offers and admissions to trading.
• Not to apply the Product Intervention and Product Governance sourcebook (PROD) to cryptoasset firms, on the basis the Duty will provide the appropriate level of protection for retail consumers.
• Not to apply the Duty to trading between participants of a UK qualifying cryptoasset trading platform (QCATP).

CP26/4 also sets out the FCA's proposals on:

• Conduct standards – how the Conduct of Business sourcebook (COBs) should apply to cryptoassets. 80% of respondents to the first consultation paper agreed with the approach of applying the relevant COBs provisions to cryptoasset firms. The FCA intends to extend the Handbook Glossary definition of "designated investment business" (DIB) to include the future cryptoasset regulated activities. Notable COBs rules the FCA intends to apply to cryptoasset firms are the communication / financial promotion rules under COBs 4, distance communication rules under COBs 5, and appropriateness rules under COBs 10.
• Restrictions on use of credit to purchase cryptoassets – notably the FCA does not intend to restrict firms from accepting credit card payments.
• Its approach to redress and safeguarding, training and competence, and regulatory reporting.

The deadline for responses to the proposals is 12 March 2026.

To read the FCA's consultation paper, please click here.

FCA launches review into long-term AI impact on retail financial services

On 27 January the FCA announced that it was launching a review into the long-term impact AI is likely to have on the retail financial sector, including consumers and regulators. The FCA is seeking input from firms, consumer groups, academics and politicians, among others, and the deadline to give feedback on the review is 24 February 2026.

Sheldon Mills, Executive Director of the FCA, said in his introduction to the Review published on the FCA website: "I want to explore a range of plausible futures and offer clear recommendations to ensure the FCA remains prepared, adaptive and able to support a thriving, innovative UK financial services sector."

In terms of the themes addressed by the Review, the FCA explained that there are four primary themes, which are interrelated:

1. How AI could evolve in the future, including the development of more autonomous and agentic systems.
2. How these developments could affect markets and firms, including changes to competition and market structure and UK competitiveness.
3. The impact on consumers, including how consumers will be influenced by AI but also influence financial markets through new expectations.
4. How financial regulators may need to evolve to continue ensuring that retail financial markets work well.

To read the full announcement and find out how you can provide feedback on the Review, please click here.

FCA calls on the insurance industry to help close the protection gap

The FCA has published interim findings from its pure protection market review and is now inviting feedback from the insurance industry and stakeholders on how to help close the protection gap.

According to the FCA's interim analysis, many consumers are unaware of their protection needs and approximately 58% of adults in the UK do not hold a pure protection product, even though many could benefit from it.

The FCA is, amongst other things, seeking views on ways in which the market and regulators can help improve awareness and how the process for switching products can be improved.

The FCA requests feedback on its interim findings by 31 March 2026 with a final report, setting out final findings, expected in Q3 2026.

To read more, please click here.

With thanks to this week's contributors: James Parsons, Alison Thomas, Daniel Goh, Heather Buttifant, Ben Simmonds, Kerone Thomas, Rebekah Bayliss