Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will undertake a review of the operation of the Financial Conduct Authority rules to ensure a cap on excessive early exit charges since April 2017.

The Government continues to work closely with the FCA to ensure there is a competitive, innovative retirement income market and that customers are treated fairly and benefit from appropriate protections.

After the pension freedoms were introduced in April 2015, some consumers were facing early exit charges of 5% or more of the fund value. Consequently, the Government legislated for the FCA to introduce a cap on early exit charges, which came into force from 31 March 2017. The Government estimated that the 1% cap introduced by the FCA would lead to savings for consumers of £42.7m between 2017 and 2020.

The Government has no plans to undertake a review of the operation of the early exit charge cap at this time.