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Britain proposes fee cap on cashing in pension pots
[LONDON] Charges on Britons cashing in their pension early will be capped at one per cent of the pot's value from March 2017, the Financial Conduct Authority proposed on Thursday.
The FCA also announced that insurers will not be able to apply any early exit charge for personal pension contracts entered into after the proposed new rules come into force.
Britain has introduced so-called "pension freedom" reforms in a bid to give people aged 55 years or over more choice in providing for their retirement, but high exit fees have put off some people.
"This is an important step so people feel able to access their pension savings should they wish to," FCA director of strategy and competition, Christopher Woolard, said in a statement.
If the exit charge in a pension contract is already set at below one per cent, it cannot be raised, the FCA said.
Separately, the government will consult on capping early exit charges in occupational pension schemes, the watchdog said.