ABI response to consultation on pension transfers and early exit charges

"No pensions sold on the market today have early exit fees and nearly nine out of 10 people making use of the pension freedoms will not face an early exit fee.

"Providers will engage constructively with this consultation so all the relevant facts and issues can be fully understood.

"Many people are accessing the pension freedoms successfully, with more than £1.8 billion withdrawn in the first two months. For those few that are encountering problems we have set out an action plan to address these issues, which is with Government and the FCA."

Background – what are exit fees?

Nearly nine in ten customers eligible for the pension freedoms will not face early exit fees, and no pensions being sold today include them.

Where some older schemes charge an exit fee this is not a new penalty but reflects the costs of setting up the policy already paid by the provider. This would normally be paid back by the saver if they had stayed in the scheme to their retirement date as originally intended. Other customers with pensions will have already paid their own fees, either when they joined a scheme or over its lifetime.