George Osborne reported following his Second Budget on 8 July, that since the Pension Reform, in April 2015, over 60,000 pension holders have accessed their pension funds, transferring out more than 1 billion pounds.
However, some pension companies appear to be charging high fees for early withdrawal, which goes against the objective, says the Chancellor.
Taking advantage
Taking advantage of the new rules regarding early withdrawal 0f pension funds it proving of interest to many pensioners over 55.
Some are using their pension funds to live on through early retirement, others to reinvest and others to fulfil personal dreams during their post-working years.
Possible excessive charges
There are certain circumstances however, reported in the media, where pension companies are restricting the early withdrawal freedoms by charging excessive fees to put off their customers from making this decision.
“There are clearly concerns that some companies are not doing their part to make those freedoms available” George Osborne
The Government are investigating with the Financial Conduct Authority (FCA) on how to remove barriers and are considering capping fees for pension providers as well as making transferring between pension schemes a smoother and simpler process.
“People who have worked hard and saved hard deserve a better deal” George Osborne
Protecting yourself
There is expected to be more news next month.
In the meantime whilst further measures are being decided, ensure you understand the terms set out by your pension provider, so you don’t get any nasty surprises.