Pensions  

Providers reveal scale of demand for pension transfers

Providers reveal scale of demand for pension transfers

Demand for pension transfers continued to soar in the second quarter of 2017, according to providers.

Scottish Widows said in the second quarter of this year there was a 182 per cent increase in the number of requests for its transfer value analysis report service on the same period last year.

Overall there were more than 1,200 requests in the three-month period – a 9 per cent increase on the previous quarter.

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Ronnie Taylor, director of distribution at Scottish Widows, said: “A Tvas report is a mandatory regulatory requirement for advisers, and even though the quarter-on-quarter increase in requests that we’ve received is relatively small, it shows that there’s still a steady appetite from people wanting to find out what their pension is worth.

“We hope that the FCA’s review into defined benefit transfers results in greater and clearer guidance for advisers to help them manage these high levels of demand with confidence.

“But that is not the sole answer to making sure people get the right outcomes for their circumstances; it has to be a combined effort between advisers, providers and the FCA.”

Earlier this year Prudential said it had seen an “eight-fold” increase in demand for its Tvas service over the past two years.

While it did not provide figures, Prudential said demand was “broadly in line” with the high levels already seen earlier this year.

Vince Smith-Hughes, retirement expert at Prudential, said: “Throughout the first half of 2017, we have continued to see strong demand for our Tvas service as advisers assess the advantages and disadvantages for their clients of transferring from defined benefit to defined contribution schemes.”

Earlier this year Novia launched a Tvas service which is free for platform users and chief executive Bill Vasilieff said demand had taken off already.

He said: “We have come from nothing to quoting around £125m so far already.

“We launched the service because of demand – advisers were asking if we could help them with this.

“We thought interest would be high but it has been a lot higher than we thought.”

According to the latest figures from Xafinity, transfer values fell slightly in June 2017 but remain at their elevated levels.

Transfer values decreased by 3.7 per cent over the month, with average transfer values now stand at around £232,000 for a pension worth £10,000 a year at age 65.

That's still £22,000 more than the same pension was worth on 1 June 2016, before the UK voted to leave the European Union.

Transfer values have been fluctuating around the £235,000 level since January, with their peak at almost £245,000 in April.

Justin King, a chartered financial planner with Dorset-based MFP Wealth Management, said he has seen an increased demand for his services from people looking to transfer.

He said: “There are quite a few people who are after it.

“Sometimes if someone in a company gets a transfer value, they start telling their colleagues about it.