Pension exit fees capped

The Financial Conduct Authority has confirmed that exit charges for people taking money out of their existing pension pots will be capped at 1% from next April. This relates to Defined Contribution (DC) arrangements such as AHBRSP. Our provider, L&G, do not charge any exit fees to members who wish to transfer their funds to another arrangement, and there will be no change to this following the announcement.

This is, however, welcome news if you have other DC arrangements as charges are often levied by providers when people take their money out. These charges can have quite an impact on the amount of money people have available to fund their retirement and deter some from transferring existing pensions into one pot, where they can easily manage their savings. The new rules will take effect from 1 April 2017 and mean that these charges now cannot exceed 1%.