Scottish Widows to remove workplace pension exit fees

It is also in the process of reviewing the exit charges on its individual pensions.

The government recently announced that it will limit early exit charges for pensions by introducing legislation which requires the FCA to cap early exit charges.

The regulation will be introduced before the end of March 2017, but Scottish Widows is one of the first providers to remove exit fees in response to the announcement.

Peter Glancy, Head of Industry Development at Scottish Widows, said:

“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.”