Fears over pension freedoms, rent rises and financial advice

Cracks are beginning to show in the new pension freedoms, hailed by the Chancellor as a ‘pensions revolution’. About 160,000 people have had to pay fees to access their pensions since these freedoms were introduced in April 2015, with some seeing more than 10 per cent of their retirement pot swallowed up by charges. The study by Citizens Advice and published in The Guardian said that those with smaller pots were the group hit the hardest. Last month, the Financial Conduct Authority announced that exit charges for people cashing in their personal and stakeholder pensions are likely to be capped at 1 per cent of the value of a member’s pot. These early exit fees are imposed on someone when they transfer or take their benefits over the age of 55 but before retirement age. Evidence emerged that some companies were imposing punitive charges on over-55s trying to take advantage of the freedoms which abolished the requirement to convert a pension pot into an annuity, leaving people free to do whatever they like with their retirement cash.