The Financial Conduct Authority (FCA) has proposed to ban early exit charges for new pension freedom contracts and cap existing ones at 1% of the value of the pot.
In a consultation paper out on 26 May, the regulator said the new cap will affect personal and stakeholder pensions - both individual and workplace - and self-invested personal pensions. The Department for Work and Pensions is separately consulting on a cap on early exit charges in occupational pension schemes. Existing contracts, which have early exit penalties set at less than 1% of the member's policy value, will not be able to raise the charges under the proposals. The legislation was first announced by the Chancellor in January after a Treasury review into pension freedoms rev...
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