Pledge on '˜rip-off' exit fees

George Osborne outlined plans to place a duty on the Financial Conduct Authority (FCA) to cap excessive early exit charges for people using the new pension freedoms.

Launched in April last year, the pension freedoms give people aged 55 and over more flexibility to use their pension pot how they wish, rather than being required to buy an income called an annuity.

But as the freedoms got under way, reports emerged of people facing high charges for moving their money.

So far, nearly 400,000 pension pots have been accessed flexibly under the new freedoms.

Speaking at Treasury oral questions in the House of Commons, Mr Osborne said: “The pension freedoms we’ve introduced have been widely welcomed, but we know that nearly 700,000 people who are eligible face some sort of early exit charge.

“The Government isn’t prepared to stand by and see people either ripped off or blocked from accessing their own money by excessive charges.”

“We’ve listened to the concerns and the newspaper campaigns that have been run and today we’re announcing that we will change the law to place a duty on the Financial Conduct Authority to cap excessive early exit charges for pension savers. We’re determined that people who’ve done the right thing and saved responsibly are able to access their pensions fairly.”