Scottish Widows is removing exit fees also together from its workplace and personal pension plans, going beyond the 1 per cent maximum required by the regulator.
The move means customers will be able to switch to alternative products or providers, or to exercise pension freedoms, with no exit penalty. The FCA had ordered all exit penalties be capped at 1 per cent of the fund’s value. Contract-based schemes must comply by the end of March, with trust-based arrangements given a further six months to meet the new rule.
Scottish Widows retirement expert David Lascelles says: “It’s only fair that people who have saved responsibly and diligently are allowed to access or move their funds without being charged to do so; that’s why we’ve gone one step further than the requirements and removed them altogether. This means our customers can make full use of pension freedoms, if they wish to do so, and not feel restricted in any way.”