The Department for Work & Pensions (DWP) is planning to cap early exit charges for occupational pensions to ensure people over the age of 55 are not "unfairly penalised" for accessing their savings ahead of their pension age.
The DWP said people currently face average early exit charges of around 5% of their pension pot for cashing in their savings but the cap would be set at 1% for existing occupational pensions and 0% for any new contracts. The 1% cap is set to apply to the value of the member's pension pot after any Market Value Adjustments. "We are restoring fairness and creating a level playing field in a system that has favoured the interests of providers over consumers for too long," said minister for pensions Richard Harrington (pictured). "This new cap will protect people's savings from excessi...
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