Pension early exit charges will be capped from March next year, the government has confirmed.
The Chancellor announced plans for a cap on early exit fees last month and tasked the Financial Conduct Authority (FCA) with overseeing the policy.
George Osborne said anyone who wanted to utilise pension freedom reforms would no longer face “prohibitive” exit fees when transferring out of old schemes.
In its response to the Pension transfers and early exit charges consultation, the government said the FCA would set out its next steps shortly with a March 2017 implementation target.
It added: “The Pensions Regulator will work alongside the FCA as they develop the design and level of the cap for FCA-regulated schemes to ensure that any relevant concerns with respect of trust-based schemes are appropriately addressed for all consumers.”
Last month, Osborne told MPs: “The pension freedoms we’ve introduced have been widely welcomed, but we know that nearly 700,000 people who are eligible face some sort of early exit charge.
“The government isn’t prepared to stand by and see people either ripped off or blocked from accessing their own money by excessive charges.”
However, providers hit back at the claims and accused the government of “pandering to the tabloids” on the issue.