The Government is weighing plans to install a cap on “excessive” pension exit charges, Chancellor George Osborne has announced.
Speaking in place of David Cameron at today’s Prime Minister’s questions, Osborne said the Government had taken note of concerns that savers would not be able to access a full range of freedoms following the launch of the reforms in April.
He said: “There are clearly concerns that some companies are not doing their part to make those freedoms available, and we are investigating how to remove barriers.
“We are considering now a cap on charges and have asked the FCA to investigate. People who have worked hard and saved hard deserve a better deal”
Osborne’s comments come a week after members of the House of Lords hit out at the Government’s failure to intervene on “ridiculously high” drawdown charges.
In a statement, the Treasury said Osborne was seeking to make sure savers are treated fairly when moving savings to a provider offering flexible access options.
In a consultation to be launched next month, the Government will look at how to address any “excessive” early exit fees, including a cap, as well as how to smooth the process of transferring pensions from one provider to another.
City minister Harriet Baldwin has also written to the FCA to demand the regulator gathers information on problems for individuals who want to transfer to a different pension provider.
An FCA spokeswoman said: “It is in the interest of all consumers that the retirement market works well following the pension reforms. We are already monitoring how firms have been implementing the changes and will be gathering further data in the next few weeks.”