We are publishing Handbook rules that discharge a new duty placed on us by parliament to cap early exit charges in existing and new personal and stakeholder personal pension schemes.
In the 2014 and 2015 budgets, the government announced a series of reforms to the UK retirement market which included changes to how consumers can access their pension savings at normal minimum pension age (‘pension freedoms’). Parliament has since placed a new duty on us to cap early exit pension charges for consumers accessing the pension freedoms.
In May 2016, we published our consultation on capping early exit pension charges (CP16/15[2]). In the consultation we set out our proposals and draft Handbook rules for the application and level of a cap that we believed appropriate to discharge the duty placed upon us. We have carefully considered in detail all the comments and feedback received in finalising our rules.
Who this applies to
This Policy Statement will primarily be of interest to consumers eligible to access the new pension freedoms who would currently incur an early exit charge for doing so. It will also interest providers of personal and stakeholder pensions, including operators of self-invested personal pensions
It may also be of interest to individuals and firms providing advice and information in this area. It will also be relevant to trade bodies representing financial services firms and consumer bodies.
What you need to do
Firms affected by these changes will need to ensure compliance with the charge cap from 31 March 2017 onwards.