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DB pension transfer requests double

27 August 2015

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Pension transfer requests from DB schemes to DC schemes have doubled since the pension reform in April, according to research from one provider.

Data from Selectapension, found the number of enquiries about changing pension has increased 106% year on year since the government's pensions reform became effective.

The research found that in the three months from April 2014, 59% of reviews were for those over the age of 50, but this has risen to 77% in the corresponding period in 2015.

Selectapension said results suggested people approaching retirement are actively reviewing their pension pots.

The company's managing director Andy McCabe said: "Pension freedoms have started to make a considerable impact on consumers and have acted as a catalyst for many to reassess whether remaining in a DB scheme is the best option."

At the same time, advisers are experiencing a "marked shift in demand" with a higher number of older clients asking for reviews, he added.

"But it's important to recognise that transferring from a DB scheme is not suitable for everyone and a decision as complex as this should not be made hastily, but with comprehensive financial advice," he said.

The data from Selectapension also revealed some habits of advisers when it comes to selecting the most suitable plans for a potential transfer.

It found the top providers chosen were Royal London, Scottish Widows, Prudential, and Liverpool Victoria.

Since the introduction of pension reforms in earlier this year, DC savers have been able to access their pension pots from the age of 55, while DB schemes do not offer the same option.

The government put in place a requirement that qualified advisers sign off the transfer where the transfer is valued above GBP 30,000.

First published 27.08.2015

Lindsay.sharman@wilmingtonplc.com