The ageing population brings both opportunities and risks for firms, who should target their clients earlier to prepare them for old age.
The watchdog said that there are three main factors which are driving increased risk. Firstly, a growing shift in emphasis between state and private pension provision. Secondly, the move of investment risks from company pension schemes to individuals. And thirdly, the increased life expectancy.
Carol Sergeant, managing director of regulatory processes and risk directorate, said: "The consequences of an ageing population have not yet been fully appreciated. There are risks here, but there are also opportunities for innovative products and services that address the changing needs of consumers. It will not be enough for the industry simply to continue offering the products that worked 30 years ago.
"Consumers, too, must understand that they will face greater exposure to the effects of financial volatility. They have difficult but important decisions to make. There is a role here for the FSA, government and the industry itself to get this message across before it is too late and to help consumers meet the challenges."
Among the pledges made by the FSA include the encouragement of retirement planning, particularly among younger consumers, and to raise understanding of the risks associated with exposure to investment and inadequate savings.
