The Government’s consultation into pension transfers and early exit charges closes soon. Here’s the Economic Secretary to the Treasury, Harriett Baldwin, asking for your views.
In the seven months since the pension freedoms have come into effect, over 200,000 people have taken advantage of their new rights to access their retirement savings how and when they want to. More than 90% of people are now being offered some degree of flexibility within their existing scheme and a quarter of the largest firms are planning to launch new products in the next six months. It is clear that the pensions landscape is shifting, and that it is shifting in favour of consumers.
But the Government knows that the job is not finished. While our reforms have allowed many of you to exercise these new rights, we know that too many people are still facing unnecessary barriers to access their money. It is only right that providers allow eligible members who wish to transfer to do so easily, within a reasonable time-frame and at a reasonable cost. Where providers are standing in the way of allowing consumers to switch, they are acting against the spirit of the reforms.
We need your views
We’ve been consulting over the summer on options to address these barriers, including how you can better understand whether you need to seek financial advice in order to transfer your pension.
It is vital that we reach any decision on the basis of the evidence we receive, and the pension regulators have already gathered data from providers on these issues. However, I know that all too often, amidst the formality of government consultation processes, the voice of individual consumers can be drowned out.
That’s why we’re running a consumer survey alongside this consultation, to give you the opportunity to tell us about your views and experiences directly.
Early exit pension fees
With the consumer survey closing on Monday (26 October), I would encourage any of you who have been affected by these issues to take our survey. It shouldn’t take longer than fifteen minutes and will ensure that your voice is heard.
Some of these questions include:
- Have you tried to access your pension savings before your selected retirement date? How was the process for you? Were you encouraged to seek independent financial advice before doing so?
- What do you think could be done to make the process for transferring pensions from one scheme to another quicker and smoother?
- Were you charged an early exit fee? Were these charges explained clearly? What would constitute an ‘excessive’ or unfair early exit charge to you?
This is a guest contribution by Harriett Baldwin, Economic Secretary to the Treasury. All opinions are Harriett’s own, not necessarily those of Which?
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