Investments made through pension wrappers have reached a new high of £13.4bn in the third quarter of the year, up 66.3 per cent on last year.
According to analysis from intermediary database provider Equifax Touchstone pension investments rose 2.8 per cent, or £363.7m, on the previous quarter.
Pension investments include outright investments into a pension, as well as transfers in from other pension products.
The data covers about 90 per cent of the UK’s main life and pensions companies and was extracted at the end of Q3 2017.
The figures showed the amounts coming into pensions through transfers was particularly high.
For instance, transfers into self-invested personal pensions (Sipp) more than doubled over the past 12 months to reach £1.9bn, whereas new Sipp sales suffered a slight dip of 4.1 per cent on Q2 figures (£111.7m).
In fact, transfers across all products rose 54.3 per cent year-on-year and 5 per cent during the third quarter to reach £6.4bn, according to Equifax.
Total pension investments, excluding transfers, reached £7bn in Q3 2017, a marginal gain of 0.9 per cent on the previous quarter but a 78.9 per cent increase year-on-year.
John Driscoll, director at Equifax Touchstone, said: “Pension investments during the quarter have remained extremely positive, building on strong performance throughout the first half of the year. Inflows remained resilient to political and market uncertainty, buoyed by strong performance of stock markets.”
He added: “In the final quarter of the year we expect to see high volumes of pension transfers persist; defined benefit transfers in particular will continue to soar as savers look to benefit from temptingly high transfer values.”
Equifax’s figures underline general trends following the government’s pension freedom reforms of 2015.
The reforms gave defined contribution (DC) savers unfettered access to their pots from age 55 but did not afford the same rights to defined benefit savers.
For many DC savers the changes meant they were able to access their cash freely without having to purchase an annuity as would have been the case under the old system.
As a result, many flocked to take their cash out while income drawdown sales also spiked.
At the same time many DB savers wanted to benefit from pension freedoms, which created a flurry of DB transfer activity, leading to more safeguarded pensions being put in products such as Sipps and income drawdown.
carmen.reichman@ft.com
