Caps on early exit charges are confirmed

Last week, the FCA announced that a cap on early exit charges from pension policies which will be introduced from 31st March 2017. The key points to note are:

• The cap is that the exit charge cannot be more than 1% of the value of the policy
• It only applies if you are age 55 or over
• The announcement is in respect of pension policies but it is expected to apply to pension schemes as well later in 2017; we await the announcement on this
• You may still have an adjustment to the value of your pension pot due to investment fluctuations (a Market Value Adjustment); this applies on with profits pension policies typically
• Any new pension arrangements taken out after March 2017 will not be allowed to apply exit charges

For more details on how early exit charges work and how they may affect you, please read our new Spotlight document here.

Or, for more help and guidance with your pension please contact our team directly on 0300 123 1047 (Monday- Friday 9:00am-5:00pm).