The charity said high fees were “stifling” the pension freedom rules, which were introduced in April this year and gave all savers aged 55 or over full access to their pension.

It said fees should only be “permitted where providers face genuine administrative costs of exit or transfer”.

Citizens Advice made the comments in its response to the government’s consultation on punitive early exit charges imposed on people cashing in their pension pots.

Analysis by the charity found that more than two million consumers could face an exit charge of over £50, including almost 40,000 who could be hit with a charge of more than £5,000.

The charity said the pension freedom agenda “will be hindered if people do not feel that they have fair access to their pensions”.

It has also called for a maximum pension transfer time limit to be introduced, following the time limit model introduced in other areas of financial services such as switching current accounts or ISA transfers.

In its consultation response it suggests aiming for a 15 day time limit but also calls for safeguards to ensure this does not put consumers at greater risk of scams.

Gillian Guy, chief executive of Citizens Advice, said: “Excessive exit charges risk stifling the pension freedoms.

“If people do not feel they have fair access to their pensions they may choose not to take advantage of pension reforms, even if this might be the best option for them. Providers must be transparent about costs and any exit charge or transfer fee should reflect the actual cost of a customer’s decision to move their pension savings.

“Six months on from the introduction of pension freedoms many consumers have enjoyed a smooth process when accessing their pension savings. But a significant minority have faced challenges such as high charges and delays. The industry must work with government to iron out these difficulties and ensure all consumers are free to make the best pension choices for them.”

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