You are here: Home -

Treasury to probe ‘punitive’ pension freedom charges

0
Written by:
17/06/2015
The Treasury is to launch an investigation into excessive early exit charges imposed on people cashing in their pension pots.

Speaking at Prime Minister’s Questions, Chancellor George Osborne said the Treasury’s consultation, due to launch next month, will look at ensuring people are not charged excessive early exit penalties. This could include imposing a cap on these charges for those aged 55 or over.

The consultation will also look at the process for transferring pensions from one scheme to another quicker and smoother.

The new pension freedoms, which came into effect on 6 April, allow people to access their savings how and when they want.

So far 60,000 savers have taken out a total of £1bn since the pensions freedom came into effect, according to government figures.

However, reports have emerged of investors experiencing problems accessing their retirement savings.

In a statement, the Treasury said: “The government has already strengthened the right to transfer to a new pension scheme but is clear that it wants all individuals to be able to transfer their pension easily, within a reasonable timeframe and at reasonable cost, so that they can take full advantage of the new flexibilities.”

Tom McPhail, head of pensions research at Hargreaves Lansdown, said: “The government appears to be losing patience with those elements of the pensions industry which are failing to measure up to the promises of freedom.

“Every pension investor over the age of 55 should be able to access their retirement savings with the minimum of cost and administrative inconvenience. It is not acceptable to charge punitive exit penalties or to insist that investors pay for a financial adviser. Any pension providers or schemes which can’t or won’t deliver should let their customers leave so that they can benefit from the freedoms elsewhere.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Don’t let roaming charges ruin your summer sun

The EU may have slashed data roaming charges in half, but ‘bill shock’ is still a serious risk. Here’s how...

Close