Only around two thirds of people transferring their defined benefit pension are satisfied with the outcome, new analysis from Broadstone has revealed.
The findings, based on analysis of the FCA’s latest Financial Lives Survey, showed only 68% of those who have transferred money from a DB pension to a defined contribution pension in the last four years were happy with their choice.
This figure dropped to 64% of those with household income of below £50,000.
Despite low levels of satisfaction, the FCA data showed that more than one in 10 (12%) people with a DB pension in accumulation are considering transferring into a DC pension, with a further 6% unsure.
Of this group, over a quarter (26%) think they will proceed with a transfer but less than a third (32%) have consulted a financial adviser about the implications of a transfer.
Brian Nimmo, head of redress at Broadstone, said: “Defined Benefit pensions offer security in retirement by providing guaranteed income no matter how markets behave or investments perform.
“It is for this reason that, ultimately, the majority of pensioners with DB pension guarantees will be better served staying within their scheme. The FCA’s data suggests this remains the case with fewer than seven in 10 transferors satisfied with the outcome of their transfer.
“However, some members could see benefits from accessing cash faster from their DB pension, especially those at the smaller end of the spectrum, for a specific reason such as to pay off a mortgage or provide a gift.”
He added: “Regulations around transfer advice have tightened significantly in recent years which should give those considering a transfer peace of mind that they will receive trustworthy and expert advice on whether this is a good idea.”
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