Pension exit charges under scrutiny

Piggy Bank

Exit charges on occupational pension schemes could be scrapped as part of new proposals launched by the Department for Work and Pensions (DWP).

The proposals aim to introduce a charging cap to allow employees early access to their retirement funds without suffering high penalty charges.

The long-term aim of the proposals is to apply the cap across both occupational and personal pension schemes.

Baroness Ros Altmann, minister for pensions, says: “These changes are about giving everyone who has worked and saved hard for their retirement a fair deal by removing the final barriers to the pension freedoms.”

Harriett Baldwin, economic secretary to the treasury, says: “The government are delivering the most far-reaching changes to pensions in a generation. Over 230,000 people took advantage of our pensions freedoms in the first year by accessing £4.3 billion flexibly from their pension pots.

“Today’s consultation signals our continued commitment to ensuring that pensions freedoms work fairly for people in practice and that hard-working individuals who have taken out occupational schemes are not disadvantaged.”

The DWP will consult on the proposals with a range of parties including pension industry bodies and professionals, trustees, scheme managers and employers.