Accessing pension cash easier said than done

Many over-55s attempting to access their pension pots are finding the process harder and more expensive than they expected.

Some pension providers are refusing to allow savers to access their whole pot, and others won't allow repeated withdrawals, on the basis that existing contracts won't allow this.

They say that in order to benefit from the new freedoms, customers will have to switch to a different product - incurring fees that can run into thousands of pounds.

One 56-year-old with an £18,000 personal pension with Scottish Equitable complained to the Financial Times that she was told she'd incur a £2,000 transfer charge to move her pension into a new product that offered the new flexibilities.

And a 65-year-old former salesman from Surrey told the BBC that both Zurich and Phoenix had refused to allow him to make any withdrawals.

"All I want to do is draw it as cash," he said. "But you can't get access to your money. It seems the government came out with these proclamations, but when you try and do it, there are a number of stumbling blocks."

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A survey by the Daily Telegraph has found that most schemes will allow the full pot to be cashed in, but that few will allow repeated withdrawals.

And when savers do decide to transfer their money to a product they can actually access, they often face significant delays. While larger providers will usually take a month to carry out the transfer, smaller or older schemes can take three times as long to switch.

BT has put together a list of the 25 biggest pension providers and the fees they charge for accounts where withdrawals are allowed - it's available here.

And there's huge variation. Aviva, for example, levies an annual management charge of between 0.1% and 0.4%, with no charge for flexible drawdown and no additional withdrawal costs.

Calculate your pension income options

Trustnet Direct, by contrast, charges a £300 set-up fee, plus £150 a year for flexible drawdown; and The Share Centre charges £172.80 for annual management, plus a £270 set-up fee and a pension income payment fee of £234 a year.

Meanwhile, however, it seems that savers are being caution=us about accessing their newly-available cash. Fidelity Worldwide Investment, Aviva, Standard Life, Hargreaves Lansdown and Scottish Widows have all said that they received fewer calls than expected.

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