Demand for pension transfers from defined benefit schemes has leaped, according to pensions and investment software provider Selectapension.
The company registered a 66 per cent increase in defined benefit cases analysed by advisers and paraplanners in 2016, compared to the previous year.
Demand increased as 2016 progressed with a 120 per cent increase in cases recoded in December 2016 compared to December 2015, according to the company.
In April 2016 there were 96 per cent more defined benefit cases analysed by advisers than during the previous April.
But while more cases have been reviewed, “the product providers potentially receiving transferred pots hasn’t changed much”, said Selectapension.
Peter Bradshaw, national accounts director at Selectapension, commented: “Transferring out of a defined benefit scheme is a complex process, and it can also be a lengthy one. With full scheme information, a transfer value analysis system report can be produced within an hour, but the whole transfer process can take months.
“We welcome the recent FCA guidance on pension suitability which recognised that clients’ personal circumstances can trump critical yields.’’
Justin King, chartered and certified financial planner at MFP Wealth Management, said that the climb in enquiries for defined benefits pensions transfers is most likely to do with an issue of “heightened attention” in the market.
“Gilt yields have pushed transfer values to a record high and all you really need and what we see is just one person saying ‘Oh my God, have you seen my transfer value?’ and then their colleague is tempted to have a look at theirs and so on.
“The cash equivalent transfer value information is now available on an ongoing basis, and you’re suddenly seeing say a million pounds flashed in front of your eyes on a regular basis and you think, this could be mine, and that’s difficult to ignore.”