In November last year, the FCA announced that from 31 March 2017, early exit pension charges will be capped at 1% for those customers who are eligible to access their retirement savings from age of 55.
The rules also state that for new personal pension plans started after that date, or on new increments into existing personal pension plans after that date, no early exit charges can be applied.
The DWP intend to apply the same early exit charge cap for plans taken out under occupational pension schemes, and is looking at this coming into force in October 2017.
For all existing personal pension plans which currently have an early exit charge of more than 1%, this charge will be capped at 1% for all eligible customers, effective from 31 March 2017.
We’ll also be introducing the early exit charge cap for existing eligible plans taken out under occupational pension schemes from 31 March, so ahead of the proposed October deadline.
For customers not yet eligible to access their retirement savings, any early exit charges will apply as normal.
How we’re supporting customers
For customers who get in touch with us before 31 March, we’re letting them know about the changes and if these impact them. We’re also recommending they contact their financial adviser for further guidance and sending them a leaflet which includes an example of how the new rules could affect the value of their pension fund.
We’ve also published a message on our consumer website to let all customers know about this change and directing them to a financial adviser for more information.
If you have any questions about this, please call us on 0345 60 50 050.