Cash transferred out from defined benefit (DB) schemes to defined contribution (DC) plans more than doubled in 2017, reaching £20.8bn, data from the Financial Conduct Authority (FCA) reveals.
According to a freedom of information request from FTAdviser’s sister newspaper Financial Times, the watchdog registered £7.9bn transferred out in 2016.
Since the introduction of pension freedoms in 2015, the number of people transferring out of their final salary pensions has been soaring, as savers seek to take advantage of sky-high transfer values and to move their nest eggs into DC schemes in order to access their cash.
Data from actuarial firm XPS Pensions Group (formerly Xafinity) showed that final salary transfer values stood at £232,000 at the end of April.
In total, 92,000 transfers from DB to DC schemes were reported last year — a 50 per cent increase, when compared to 61,000 reported the year before.
According to the data, around £5.5bn was transferred out of DB plans in the fourth quarter of 2017, compared with £2.5bn in the same period the year before.
The regulator has been focusing on the DB transfer advice market, and announced that it will be collecting data from all financial advice firms which hold pension transfer permissions during this year.
In January, the watchdog sent a letter to all firms holding pension transfer permissions revealing the red flags the regulator will be looking for when it enters advisers' offices.
FCA’s DB transfer numbers are, however, different from the ones registered by The Pensions Regulator (TPR) and the government.
The pensions watchdog revealed earlier this month that the value of pension transfers in a year up to March 2018 reached £14.3bn, corresponding to 72,700 transfers.
According to the Office for National Statistics, funds transferred out of pension schemes almost tripled to a record £34.2bn in 2017.