Fair Value and Pricing: FCA Good and Poor Practice

Under the Consumer Duty, firms must be able to show that the price a customer pays is reasonable compared with the benefits they receive. The FCA has now published a collection of good and poor practice from its supervision of fair value assessments, first in September 2024 and updated in July 2026. This guide summarises that publication. It supports our Fair Value and Pricing Outcomes course overview, and sits alongside our guides to the FCA Consumer Duty in 2026 and to MiFID product governance.

What the FCA published

The FCA's page, "Price and Value Outcome: Good and Poor Practice", collates supervisory insights on fair value under the Consumer Duty. According to the page, it was first published in September 2024 and updated on 10 July 2026 to replace the earlier version. The FCA says the examples do not create new rules, firms do not need to adopt every one, and the 2026 update clarifies existing expectations and adds examples without changing the underlying rules.

Key expectations

The page sets out several expectations. Fair value should be built into product design, pricing, approval and ongoing review, not treated as a retrospective exercise, and the FCA says that where this is not done and there are poor value outcomes, "we will act". Assessments should record the analysis made when decisions were taken, including how poor-value risks were identified and handled, with Board-level challenge. They should draw on evidence about products and services, consumer understanding and consumer support, and firms should understand who their products are for, how customers use them and what outcomes different groups get.

Where firms use differential pricing, the page says they must show that each customer group receives fair value and must not rely on inertia or behavioural biases to sustain price differences. Identifying a problem is not enough: firms need specific actions, timelines and monitoring of results. Smaller firms with simpler products may use simpler processes, but assessments must still be robust. And price is not the only test, because the rules do not set prices or require the lowest price, and non-financial costs such as time and effort also count.

Good practice the FCA observed

• Boards reviewed broader metrics than financial performance, such as whether products were used as intended and whether some groups derived less value.
• Firms modelled total costs for typical usage patterns and customer segments.
• A bank benchmarked international payments against a broad, representative peer set using standardised scenarios, which exposed high-value outliers and led to a pricing change.
• Firms used care flags to track vulnerable customers' outcomes and acted on the results.
• Premium finance firms cut interest rates, arrangement fees and late payment charges after fair value reviews, and tracked the effect.
• Wealth managers flagged dormant cash balances and nudged clients toward better arrangements.

Poor practice the FCA observed

• Fair value assessments were written after the event to justify existing pricing.
• Assessments relied on stated benefits and price, ignoring usage data, customer understanding and support.
• Products with materially different terms were grouped together.
• Target markets were too broad. The FCA's example is GAP insurance sold to anyone buying a car, even where it offered little value, such as for older, lower-value vehicles.
• Benchmarking used an unsuitable comparator group, or treated market-average pricing as proof of value.
• Mitigating action was limited to a letter telling customers they were getting a low rate, with no alternatives or monitoring.

More examples from the page

The page gives examples beyond the headline points. Business current accounts were assessed through an overarching assessment plus component assessments for payments, overdrafts and ancillary services. Investment platforms linked retained interest to the actual cost to serve, using illustrative customer examples. On the poor-practice side, the FCA cites fee structures that were opaque or uncapped, such as time-based pension consultancy charges with no cost estimates, and cost claims that were vague, with "cost-plus" reasoning used to justify higher prices. It also cites off-sale savings customers who received lower rates without evidence that costs or risks justified the gap.

Evidence the FCA used

The page says the FCA drew on reviews of firms' fair value assessments and supporting governance materials, including Board and committee papers, and on ongoing supervisory engagement across retail banking, consumer finance, wealth management and pensions, asset management, payments and crypto assets. Outcome measures it mentions include product usage, claims take-up, complaints, retention and fee incidence.

Using this in a pricing or product role: our suggestions

These steps are our suggestions, not requirements in the FCA publication.

• Date-stamp assessments and keep the papers showing what was known when pricing was agreed.
• Pair every price comparison with usage and outcome data for each customer group.
• Write down the action, owner and date for every gap the assessment finds.

For structured learning, browse our CPD courses.

What we could not confirm

The page's update note refers to an earlier version dated 18 September 2024, which conflicts with the 16 September 2024 publication date shown on the page. We did not read the underlying Consumer Duty rules in the Handbook, and we did not review the Central Bank of Ireland's position on value, so this post covers UK firms only. Check the current FCA page before relying on this summary. This post is general information, not legal advice.