Pensions - Articles - Volume and value of pension transfers increase again

Year-on-year data from Origo via its Options Transfers service, reveals the volume and value of pension transfers have increased for yet another year, with almost £31 billion of pensions money being moved by the service in 2017. The service carried out over half-a-million transfers during the year while keeping the average transfer time down to 10 calendar days.

 The not-for-profit fintech has been handling the industry’s automated pension transfers through its Options Transfers since 2008 and has transferred in excess of £130 billion of pensions money in that time.
 With more than 100 brands using the service – across the range of pension providers, administrators and platforms – the Options Transfers service data provides the most comprehensive insight available into transfer trends in the industry.

 This latest data from Options Transfers continues to show a dramatic rise in transfer volumes through the service in the years since the pensions freedoms were announced:
 Jan – Dec 2014: £17.3 billion
 Jan – Dec 2015: £21.5 billion
 Jan – Dec 2016: £24.3 billion
 Jan – Dec 2017: £30.9 billion

 Data show that the value of the transactions through the Options Transfers service is also rising – up 27% on 2016 and a staggering 44% since 2015, when the Pension Freedoms were introduced. The average payment amount in a pension-to-pension transfer was £57,000. One reason for the rise in value is the growing number of transfers to SIPP providers, which tend to be higher value tickets.

 Transfers into SIPPs dominated in 2017
 The Options Transfers data show that transfers into SIPPs dominated the pension transfer market in 2017, accounting for 51% of all transfers in through the Options Transfers service.

 In addition, there was a 30% increase in volumes and a 39% increase in the value of the transactions into SIPPs over 2016 figures.

 Since 2014, when the Pensions Freedoms were first announced, volumes of transfers into SIPPs have almost doubled (98%) and values have more than doubled (121%).

 Anthony Rafferty, Managing Director, Origo comments: “Origo’s Options Transfers service continues to prove its value to the industry, with increased volumes and values of transactions passing through the service year-on-year, while ensuring an average transfer time of 10 calendar days.

 “As more and more people have sought to move their pension money where it can benefit from the greater flexibility offered under the new rules, so the volumes have risen. Transfers are likely to continue as more people reach the age at which they will want to consider transferring their pension to access the Freedoms. Our data shows that the average age for people transferring their pension is 53.

 “SIPPs in particular have seen an influx of business, with an increase of 50% in transfers through the Options Transfers service since 2015 and a 67% increase in values in the same period.”

 Rafferty adds that with volumes continuing to rise, automation of transfer processes is essential, hence the significant increase in Options members, with some 32 new customers having signed to Options Transfers since 2015.

 In 2018, this will further extend to pensions re-registration, he says. “The upward trend of pensions re-registration is only going to continue. Re-registration offers many benefits to the consumer, including not having to liquidate assets (sell and re-buy) which could cause a taxable event, as well as keeping the consumer in the market.

 “Automation of the re-registration process helps to speed up the transfer process for the end consumer while offering organisations significant cost efficiencies in streamlining their administration processes, as well as providing MI on their performance and records for auditing purposes.”

 Rafferty says he expects transfer volumes to continue to grow in the year ahead. “As more innovative and flexible products are produced in order to meet customer demand, we expect to see more transfers taking place, both in terms of volumes and value of transfers and, in particular, a rise in re-registration of assets through the Options Transfers service.”

 • Overall transfer volumes up by 15% on 2016
 • Overall transfer values up by 27%; 44% since April 2015
 • SIPPs biggest beneficiary: transfers up by 30% on 2016; 39% increase in value
 • Average transfer time remains at 10 calendar days (including time taken to process monies through the banking system (i.e. BACS).

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