The Department for Work and Pensions has launched a consultation to extend the early exit charge cap to occupational pension schemes.

The consultation has proposed a charge cap of 1 per cent for those over the age of 55 in an occupational pension scheme. However, for members joining after 1 October 2017 there will be no exit charges. Early exit penalties will remain for those under 55.

It follows the same design of legislation introduced by the Financial Conduct Authority for contract-based schemes, which came into effect on 31 March 2017. It is estimated that it will benefit 27,000 members.

Commenting on the consultation, Hargreaves Lansdown senior pension analyst Nathan Long said: “These rules will ensure all workplace pension members, regardless of the plan chosen by their employer, are treated the same when the time comes to access their retirement savings. The obvious beneficiaries are pension savers who need access because they are finishing work early.

“This is also a huge boost to those looking to control their run in to retirement. Consolidating old company pensions is a great way to stay on top of how and when you leave the workplace. Grasping control of your pension planning as soon as you can, is a sure fire way to retire with more, when you want to, or both. Extending the exit fee cap to the under 55s has to be the next step, given individual responsibility is increasingly relied upon to make pension policy a success.’

The consultation runs until 31 May 2017 and can be accessed here.

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