The Pensions Regulator has said that the number of defined benefit (DB) transfers has skyrocketed by 163% in two years, according to data obtained from a freedom of information request by Royal London.
The FOI said that the number of DB transfers reached 210,000 in the 2018/19 financial year, which equated to £34bn ($42.4bn, €38.1bn).
This was a sharp rise from just 80,000 in 2016/17 and 100,000 in 2017/18, which had values of £12bn (estimated) and £14bn, respectively.
Overall, the total value is at £60bn for 390,000 DB transfers since the pension freedoms were introduced three years ago.
The data includes all transfers out of DB schemes and may therefore include a limited number of transfers from one DB scheme to another, rather than DB to defined contribution (DC) transfers.
|Number of transfers
|Value of transfers
Source: Royal London
Steve Webb, director of policy at Royal London, said: “These figures show the continuing huge interest in using pension freedoms to access pension rights in a more flexible way.
“Although the volume of transfers has probably passed its peak, large numbers of people are still interested in seeing whether reshaping their pension benefits would be in their interests.
“It remains the case that staying in a DB scheme will be the right answer for most people, but there may be individual reasons why a different combination of pensions would give a better outcome.
“In such cases, it is vital that there continues to be a supply of impartial and expert financial advice for those considering making such a big decision.”
The FOI data comes weeks after the Financial Conduct Authority (FCA) said it is disappointed with the number of advice firms recommending people transfer out of DB pension schemes.
The UK watchdog found that 2,426 firms had provided advice on DB pension transfers.
It said it will be directly assessing the firms most active in the DB market throughout 2019 and will be writing to all firms where it “identified potential harm” in their DB pension transfer advice.