FCA has confirmed the 1% cap on early exit penalties for existing personal and stakeholder pensions - https://www.fca.org.uk/publication/policy/ps16-24.pdf
Pensions Minister announces plans to cap early exit charges for occupational pensions at the same level - https://www.gov.uk/government/news/pensions-minister-moves-to-create-exit-charges-equality
Tom Selby, senior analyst at AJ Bell, comments:
“The cap on early exit fees for pensions, including occupational schemes, is a start but 1% of a £100,000 pension is still a £1,000 charge for accessing your own savings. The pension freedoms are now well established yet there are still thousands of people that are going to have to pay thousands of pounds to access them. We hope the authorities continue to monitor the cap to assess whether it should be lower or even abolished if early exit penalties continue to prevent people utilising the new flexible pension rules.
“The 1% cap on early exit penalties for pensions also makes the 5% Government sanctioned early exit penalty for the Lifetime ISA look preposterously inconsistent. Now the policy for pensions is confirmed, we’d like to see the same principles applied to the Lifetime ISA and the Government remove the 5% early exit fee before it launches in April 2017.”