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%.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
The Pensions Regulator (TPR) has recently acknowledged that pension scammers are being caught out and hindered by action from the government, regulators, the Work and Pensions Committee, and the wider industry, but added that vigilance is still needed.
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