Citizens Advice has said a limit on excessive pension exit fees is a step towards making sure all consumers can make the most of pension freedoms.
The national charity was responding to the Government’s announcement that the Financial Conduct Authority will cap pension exit charges.
Gillian Guy, chief executive of Citizens Advice said:
“Excessive exit charges can stand in the way of people making the most of pension freedoms. It is good news for consumers that the Chancellor is bringing down this barrier with a cap on fees.
“Many people find making decisions around their retirement finances difficult and the prospect of a sky-high exit charge could put them off making the choice which is best for them. Citizens Advice found that more than two million consumers could face a pension exit fee of over £50, including almost 40,000 people who could be hit with a charge of more than £5,000.
“A limit on early exit charges is a step towards making sure all consumers are free to make the best pension choices for them. We would encourage the Financial Conduct Authority to set the cap at no more than £50, which is enough to cover the administrative costs for providers.”