Regulatory Alerts2016-11-14
PS16/24: Capping early exit pension charges: feedback on CP16/15 and final rules
The Financial Conduct Authority issued final rules imposing a 1% cap on early exit charges for existing personal and stakeholder pension schemes and a 0% cap for new contracts effective 31 March 2017. These measures discharge a statutory duty to remove barriers preventing consumers from accessing pension freedoms by reducing the deterrent effect of high exit fees. The regulator determined that this specific cap level strikes a proportionate balance between protecting consumers and minimizing compliance costs for providers.
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