Pensions - Articles - DB Transfers continue as advice crunch looms


Defined benefit (DB) transfer values increased to yet another record high during July, whilst the number of members taking a transfer continued at pre-lockdown levels, according to XPS Transfer Watch. XPS Transfer Watch monitors how market developments have affected transfer values for a typical member, as well as how many members are choosing to take a transfer from their DB pension scheme.

 XPS Pensions Group’s Transfer Value Index rose from £259,700 at the end of June to reach a record high of £261,500 on 30 July, before falling back to end the month at £260,700. The small increase was the result of a fall in gilt yields during the month.

 XPS Pensions Group’s Transfer Activity Index fell slightly in July compared to the previous month, although the number of completed transfers remained around the levels seen prior to the COVID-19 pandemic. Transfer activity in July was at an annual equivalent of 0.94% of eligible members, down from 1.05% in June. This represents 94 in every 10,000 eligible members transferring each year.

 In market news, financial advice firms have continued to exit the DB transfer advice market, with some other firms greatly restricting the services that they offer. This is mainly a result of the recent FCA ban on ‘contingent charging’ from 1 October. There are concerns within the pensions industry about the reduction of capacity within the advice market at a time when there is an ever-greater focus on providing members with appropriate support.

 

 Mark Barlow, Partner, XPS Pensions Group commented: “The continuing rise in transfer values is making them an increasingly tempting option for members. However, there are risks associated with transferring, and employers and trustees have a vital role in ensuring members have sufficient support available when considering such important decisions.

 “As we expected, a number of financial advisors are leaving the DB transfer advice market following the ban on contingent charging. This will make it harder for members to get crucial advice, leaving them vulnerable to poor decisions or, at worst, pension scams. A recent XPS poll of more than 150 scheme representatives found that over 85% of employers and trustees agreed that pension schemes should help members to obtain financial advice. In the last year we have worked with schemes to make high quality financial advice available to 18,000 more pension scheme members.”
  

Back to Index


Similar News to this Story

94 percent view State Pension as an entitlement not benefit
Majority of adults aged 66+ say that Triple Lock is affordable and fair to older generations. Around one in seven rely on the State Pension to provide
Fair play off the pitch
Male players in the English Premier League earn an average of more than £3 million per year, while their female counterparts average around £47,000. T
Why Bitcoin matters to Pension Schemes
Back in November 2024, Cartwright Pension Trusts announced its role in facilitating the first-ever UK DB pension trust investment in Bitcoin. With the

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.