Last week the Government confirmed it will introduce a ‘permissive statutory override’ to ensure scheme rules do not prevent savers from accessing their pension fund when the reforms come into force next April. But some people who have legacy pension plans could still effectively be excluded from the reforms because of the charges they will face if they try to move their savings.
So how are some of the major players responding? Legal & General says it plans to review its books of business, including policies with exit fees attached, in light of the Budget changes. Asked whether they plan to offer the pension freedoms to all policyholders, an L&G spokesman said: “It is too early to say. We are reviewing our policies and have not finalised our position. “The majority of our customers will not have a penalty for encashment or transfer after age 55. In the minority of cases where policies have a charge for early encashment, the same charge is levied whether customers take a flexible retirement income from us or whether they move to another provider for their retirement income.”
A Skandia spokesman says: “There is still some underlying detail awaited from the draft legislation expected in a month’s time and we will be reviewing what is required to deliver the additional invested income solutions to all policyholders over the coming months.”
Aviva head of policy John Lawson says: “Due to the difficulty in changing older IT systems, people with older-style plans may have to transfer to a new-style plan to take advantage of the new freedoms. “At this stage it is not possible to be categorical about which plans can be changed to cater for the new rules because the detailed rules have not yet been published.” Enables IFA’s in Bishop’s Stortford can help you consider your plans for your pension.
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