Aviva, the UK’s biggest pension provider, is to introduce a 5 per cent cap on exit fees for all individual and workplace pension customers, Money Marketing can reveal.
Yesterday, Scottish Widows said it will remove exit fees entirely from all workplace schemes and will review individual policies in the future.
Aviva would not detail the number of customers who will benefit from the change or how many customers have policies with exit fees.
George Osborne handed the FCA a new duty to tackle “excessive” exit fees in January.
A spokeswoman says: “The vast majority of Aviva’s pensions do not carry early termination charges. Where an early termination charge does apply, we will be introducing a 5 per cent cap in the near future on the small proportion of pension policies that carry charges at this level.
“Aviva’s cap will support those customers aged 55 years and over who wish to access the pension freedoms. Aviva has been working to implement a cap across its entire pensions book, including workplace and individual pensions, for some months.
“The cap will also be extended to include those customers accessing their pension funds under ill health requirements or those with protected retirement ages.
“Early termination charges were originally designed to fairly recoup expenses incurred when the policy was set-up. However, we feel that a cap is now appropriate to ensure that customers do not face barriers in accessing the pension freedoms, which came into effect last year.”