Scottish Widows has today announced that it will be removing all exit fees across its workplace pensions, allowing customers the freedom to switch to another product or provider if they wish to do so without incurring a charge.
The move comes as HM Treasury is looking for pension providers to curb excessive exit fees, and the FCA is currently consulting on what level a cap should be.
Scottish Widows is also in the process of reviewing the exit charges on its individual pensions.
Scottish Widows head of industry development Peter Glancy says: “We believe more can be done to make the pensions market work better for customers and the removal of exit fees is a key milestone in helping to achieve this goal.
“These fees are largely associated with older style products, typically sold before 2001, and reflect expenses already paid by a provider in setting up the policy, which would normally be paid back if the saver stayed in the scheme to their retirement date. But with pension freedoms enabling people to access their money earlier than they had originally expected, we believe these fees place an unnecessary barrier on those wishing to take their money or move to a more modern product either with us or another provider.
“We are giving customers more choice by removing all exit fees. Those who value the benefits available in these older-style pensions can choose to remain in the scheme and those who feel they would be better placed in a more modern product with us or with anyone else will be able to move without penalty.”