WIREDGOV

The Financial Conduct Authority’s (FCA) has agreed a 1% cap on early exit charges for people taking money out of their pension pots.

Citizens Advice called for a cap on exit charges as people had reported to the charity that, not only did they find fees and charges confusing, they also put them off using the pension freedoms.

In June this year Citizens Advice estimated that 160,000 people have paid to access their pensions since April 2015, with those facing fees have reported an average cost of £1,577 in total.

Gillian Guy, Chief Executive of Citizens Advice, said:

“A cap on pension exit charges will bring some clarity to a very complex market.

"Exit fees and other charges vary hugely across pension providers, confusing people and putting many off using the pension freedoms. While a £50 cap would have been preferable - as that covers the cost to a provider of actually exiting your pension - the 1% cap will mean savers know how much they’ll be charged and it will reduce the costs for many people.

“Exit fees are not the only issue people have been experiencing, many are facing delays in accessing their pot and others are being hit with unclear advice charges to transfer their pension. It is important the government now looks at how it can tackle these other barriers to ensure people can plan for a financially secure retirement.”

Citizens Advice delivers the face to face To book a face to face or telephone Pension Wise session, call 0800 138 8292 or visit a local Citizens Advice to book an appointment.

Related information: FCA introduces cap on early exit pension charges

Notes to editors

1. The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
2. The advice provided by the Citizens Advice service is free, independent, confidential and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
3. To get advice online or find your local Citizens Advice in England and Wales, visit citizensadvice.org.uk
4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
5. Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.
6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,500 service outlets across England and Wales.