Old Mutual Wealth will introduce the 5% cap from 1 July 2016, and this will mean the average exit fee across all its pensions will fall by 2%, it claims. The firm said there are approximately 3,700 customers over 55 in pensions that have exit fees.
The overhaul follows the Swedish government’s decision in December to postpone a planned reform of the pension system, which would have resulted in the closure of two state pension funds and a review of the investment limits for the remaining funds.
Just over half of the withdrawals, or 55 per cent, were for cash sums of £10,000 or less.
The evidence suggests that as a group they are managing well within the new environment of pension freedom, and that they are not on the whole making poor investment decisions that could threaten their later financial security.
Vanguard, one of the largest defined contribution asset managers in the US, is ramping up its efforts to grab a larger slice of the UK market.