FCA proposes 1% cap on pension freedom exit charges

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...