Stampede quit defined benefit pension schemes
A new record has been set for pension transfers in Q1 2018, as the figure reached £10.6bn, up from £7.5bn in the same period a year earlier.
The Office for National Statistics (ONS) figures also reveal that the value of pension transfers for 2017 has been revised up by £2.5bn to £36.8bn.
While today’s figures cover all pension transfers without detailing a breakdown of different scheme transfers, AJ Bell suggests the driving force behind the record amount is down to DB transfers.
It was believed that defined benefit pension transfers had peaked in 2017 but AJ Bell said there has been a “perfect storm” for DB transfers in the UK, due to a combination of the attractiveness of pension freedoms, high transfer values and headlines about high profile companies.
“BHS and Carillion going bust all undoubtedly influenced people’s decision to quit,” said Tom Selby, senior analyst at the firm.
He added: “The Q1 2018 figure also likely includes a large number of transfers away from the British Steel Pension Scheme.
“Over time pensions transfer volumes should edge downwards as the number of people with significant funds eligible for a transfer diminishes, but as things stand we remain in the eye of the storm.
“Those who have decided to move their pot away from the security of DB will now need to take a much more active role to ensure they get the retirement they want.”
Related: See YourMoney.com’s Five reasons to transfer your DB pension (and five not to) for more information.