Changes to early exit charges
Last November, the Government announced changes to pension legislation which come into force on 31 March 2017. These changes could affect customers who are eligible to take some or all of their retirement savings, or who transfer their plan, from age 55.
What’s an early exit charge?
An early exit charge applies if you decide to take your pension benefits, or transfer your retirement savings to another provider, before you reach the retirement age agreed under your plan.
This charge wouldn’t apply if you waited until your agreed retirement age before doing the same thing.
Most of our pension plans don’t have any early exit charges.
From 31 March 2017, new rules mean that early exit charges will be capped at a maximum of 1% for existing customers eligible to access their retirement savings from age 55.
The new rules also apply in some exceptional circumstances where customers are entitled to take their benefits before age 55.
What’s not changing?
If you are eligible to access your retirement savings and your plan already has an exit charge of 1% or less, this will not change.
If you transfer your retirement savings to another provider before you are age 55 and your plan has an early exit charge of more than 1%, this will not change.
If you are invested in a With Profits plan, a market value adjustment may be made when you access your retirement savings before your agreed retirement date. This is not affected by these changes to early exit charges.
Need more information?
If you need more information about this then you should speak to your financial adviser in the first instance.
If you don’t have a financial adviser, you can find one in your area at www.unbiased.co.uk/find-an-adviser. Remember, you may be charged for this service.