Limiting early exit pension charges - announcement by the Financial Conduct Authority

February 6, 2017

Background

On 15 November 2016, the Financial Conduct Authority (FCA) and the Department for Work and Pensions (DWP) published further details around their proposals to limit early exit charges when a customer takes money from their pension plan.

How do I know if the proposals could affect me?

You may be affected if you:

  • are aged 55 or over
  • hold a pension with Zurich that has an early exit charge
  • are taking money out of your pension plan, or moving your pension plan's value in to another pension, more commonly known as a transfer.

What are the proposals?

The FCA confirmed that from 31 March 2017 the maximum exit charge a customer will pay will be 1% of the value of their pension plan at the date the benefits are paid out or transferred in to another pension. This only limits the exit penalty that applies to those aged 55 or over..

The DWP stated it intended to introduce a maximum exit charge of 1% of the value of a pension in October 2017.

You can find more information on the proposals on the FCA and Government websites:

What will Zurich do?

Zurich will be introducing the 1% maximum early exit charge for customers aged 55 or over across all affected pension plans from 31 March 2017.

We will continue to apply the current early exit charges until then..

This news may not change what you are planning to do. However, if you are thinking of taking money out of your plan then you may want to think about the actual charge you would pay, compared to the amount you want to take, and whether this would influence your decision.

If you have an adviser you may wish to talk to them about this news as we are not in a position where we can tell you what is best for you.

If you feel you need advice and don’t have an adviser please visit unbiased.co.uk or vouchedfor.co.uk where you’ll be able to find an adviser near you. You may be charged for this advice.


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