ONS figures show drop-off in pension transfers
2 April 2019
Funds transferred out of pension schemes dropped by over 20% in the fourth quarter of 2018, the latest figures from the Office for National Statistics have revealed.
Over the final three months of last year, £6.3 billion was transferred out, down from £8 billion during the third quarter and significantly below the record £10.4 billion recorded in the first quarter of 2018.
According to the data, the total value of funds transferred out in 2018 reached £33 billion – £3.9 billion less than the £36.9 billion transferred in 2017.
Since the start of the pension freedoms in 2015, as much as £92 billion has been transferred.
Tom Selby, senior analyst at AJ Bell, said the latest data suggests the pension transfer market has passed the peak point., although the magnitude of activity since the start of the pension freedoms cannot be overestimated.
He commented: “A number of factors are contributing to the recent slowdown. The FCA’s increased focus on the market has undoubtedly had an impact, forcing a number of advisers to exit the market. Rising insurance costs for advisers is also affecting supply with a knock-on impact on the volume of transfers taking place. There were also some significant cases – most notably British Steel – that have skewed transfer volumes upwards in recent years.
“The number of transfers will naturally edge lower as the population of members in DB schemes dwindles. Over time as DB schemes disappear from the retirement landscape, we are likely to reach a point where guaranteed employer-sponsored pensions are practically non-existent in the UK.”
What are the top skills employers typically want to see from a paraplanner? Lewis Byford, co-founder of financial services...
With £355 billion of debt having been accumulated in the past year and a potential £204 billion or more to be...
ATEB Consulting’s Steve Bailey examines why and how Paraplanners should consider a workplace pension in a pension transfer recommendation. Firms involved with...