The chancellor says he hopes that pension firms will make it easier for retirement savers to switch funds; however, one important side effect of this is that it will be easier to make QROPS transfers, whether they are in France or other countries inside the EU. Those looking to make the most of the situation though are likely to have to wait around two years before Osborne’s vision becomes law.
News of the developments follow announcement of Financial Conduct Authority investigation into pension exit charges.
Perhaps as a response to the investigation and associated government pressure, a number of providers, including Standard Life and Prudential have agreed to put a cap on exit fees of 5% of the fund value; LV and Royal London have also said that they will be capping fees.
“Only 3% of our customers paid exit fees between April and December 2015,” said a spokesman. “We constantly keep this under review and will only make a deduction to recoup underlying costs when the amount is fair and the company does not profit from the charges.”
The Financial Conduct Authority has said that by its calculations around 670,000 over 55s could be hit with exit charges of more than 5%.
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Once again the NS&I (National Savings and Investments) are about to cut the returns they give to Premium Bond holders. The returns they give are already poor and to reduce them further is a travesty considering the many loyal supporters Premium Bonds have.
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