Whilst this is yet another change for providers, employers and scheme members to adapt to, this move can only have a positive impact for members and go further to enhance members' trust in pensions as a brand.
The government has confirmed a cap on excessive exit charges for those accessing their pension pot early. On 19 January, chancellor George Osborne outlined a proposal to place a duty on the Financial Conduct Authority (FCA) to cap excessive early exit penalties. The FCA will be responsible for setting the level of the cap, which it will consult on in due course. The duty will be introduced through legislation, and will form part of the government’s response to its consultation on pension transfers and exit charges. The consultation, which ran between July and October 2015, sought responses on capping early exit penalties for those eligible to access the pension freedoms, ways to improve the process of transferring between pension schemes, and clarity around financial advice.