Following the introduction of pension freedoms allowing people over the age of 55 to access their pension pots, many people have found that free means paying penalties or exit fees! On older style contracts it is not unusual to find that exit penalties apply up to the nominated retirement age Although modern contracts tend to be much more cost effective, these can be as much as 10% of the value of the fund, amounting to thousands of pounds.
The Treasury has confirmed that excessive exit charges enforced by some pension providers will be banned. The precise level of the cap will be set by the Financial Conduct Authority (FCA), following a public consultation.
There is little doubt that the introduction of such a cap would be a positive step in the right direction in further restoring confidence in pensions and making them more transparent.
As the pension revolution continues full steam ahead, against the back drop of volatile world markets and further possible changes in tax relief, it has never been more important to review pension arrangements to make sure you are able to make full use of the financial and tax planning opportunities that exist.
For a free pension health check please contact Antony Keen, Director at PM+M Wealth Management, either by email at email@example.com or by phone on 01254 604303.
PM+M Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority.