An immediate government consultation will investigate whether pension exit fees should be cut or capped, the Treasury has announced.
The consultation and online survey will ask industry experts and pensioners about the barriers currently preventing consumers from enjoying fuller pension flexibility.
The review comes as a response to reports that some pension providers have failed to help pension savers make full use of the pension freedoms since they were introduced in April.
The review will consult stakeholders on:
- early exit charges and how the government can act to reduce them
- the process for transferring pensions between schemes faster and easier
- ensuring clarity for consumers on when they should get financial advice.
Government pension experts have also asked The Pensions Regulator and the Financial Conduct Authority (FCA) to provide industry information about the exit charges currently levied by providers.
The consultation and concurrent online survey will run for 12 weeks.
Ben Gaukrodger, manager for savings policy at the Association of British Insurers (ABI), said:
“No pensions currently sold by ABI members have early exit fees and nearly 9 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“Many people are accessing the pension freedoms successfully, with more than £1.8 billion withdrawn in the first 2 months.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.”