Cap could be placed on pension exit charges

The introduction of the pension reforms in 2015 was great news for Brits, as it meant that they were able to cash in their pensions from the age of 55.

However, many firms put fees in place for those wishing to take advantage of this, which in turn deterred many people from doing so.

The Financial Conduct Authority (FCA) has looked into this, and announced that new measures are to be put in place that will mean that pension providers will no longer be allowed to apply exit charges on new pension policies.

In addition, from March 2017, fees on existing policies will be capped at one per cent. Also, providers are prevented from raising exit fees on existing policies if they currently sit below the one per cent cap.

Christopher Woolard, director of strategy and competition at the FCA, said: "This is an important step so people feel able to access their pension savings should they wish to."

The government previously had concerns that high fees were deterring people from making the most of the pension reforms. However, the FCA is now being given the power to make these changes, which aim to ensure that consumers can access the government's pension reforms easily and affordably.