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What does the 1% cap on early exit fees mean for your clients?

3 April 2017 | LV= News

From 31 March 2017 the Financial Conduct Authority (FCA) are introducing a 1% cap on early exit pension charges for personal and workplace personal pensions. This means providers won’t be able to apply early exit fees on pension transfers after this date.

This is particularly important for your clients who would benefit from consolidating (PDF 1.43 MB) their various pension funds into one, easy to manage solution.

One key client segment that will benefit from this are those with older style contracts who may suffer from high annual management charges. The new limit on early exit fees now means that it’s more affordable to move money to a lower cost model, which offers access to a full range of pension freedom and choice options.

One example you and your clients could investigate is transferring everything into a low cost LV= Personal Pension, which has an annual service charge of just 0.25%. Combined with a risk rated life strategy fund from Vanguard, for example, clients could have an actively mixed investment that costs them less than half a percent a year.

Ian Noble, Head of Market Strategy for LV= Retirement Solutions: “At LV= we don’t just offer the solution; we offer the full journey for you and your clients. We fully support the 1% cap and have a number of solutions to help identify which of your clients should be taking advantage of combining their existing pensions into one fund.

“Last year we removed all pension exit charges, as part of our continuing commitment to making sure your clients are always receiving the best possible retirement outcome from us.”

For more information on the 1% cap and how we can help you, please speak to your usual LV= Retirement Consultant or contact us on:

Call: 08000 850 250


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