Exit charges on occupational pension schemes could be scrapped as part of new proposals launched by the Department for Work and Pensions (DWP).
The proposals aim to introduce a charging cap to allow employees early access to their retirement funds without suffering high penalty charges.
The long-term aim of the proposals is to apply the cap across both occupational and personal pension schemes.
Baroness Ros Altmann, minister for pensions, says: “These changes are about giving everyone who has worked and saved hard for their retirement a fair deal by removing the final barriers to the pension freedoms.”
Harriett Baldwin, economic secretary to the treasury, says: “The government are delivering the most far-reaching changes to pensions in a generation. Over 230,000 people took advantage of our pensions freedoms in the first year by accessing £4.3 billion flexibly from their pension pots.
“Today’s consultation signals our continued commitment to ensuring that pensions freedoms work fairly for people in practice and that hard-working individuals who have taken out occupational schemes are not disadvantaged.”
The DWP will consult on the proposals with a range of parties including pension industry bodies and professionals, trustees, scheme managers and employers.