Pension early-exit charges capped at 1%

The Financial Conduct Authority is consulting to cap early-exit charges for consumers who choose to access pension freedoms, at 1% of the value of a member’s pot. This will apply to existing contract-based personal pensions, including workplace personal pensions, and firms may not apply exit charges for personal pension contracts entered into after the proposed rules come into force. If existing contracts have early exit penalties of less than 1% of the member’s policy value, the proposed cap would block these from being raised.