The take up rate of defined benefit (DB) transfers remained steady at 30 per cent, despite the number of people requesting a quote declining, new figures from LCP have shown.
The consultancy firm, which provides quarterly analysis on DB transfers in the 78 schemes for which it provides pensions administration services, stated quotation rates have fallen to about 6 per cent of deferred members in 2018, compared with almost 8 per cent in 2017.
But despite the decline, which was already felt in the previous quarter, the number of people going ahead with a transfer has remained stable at 30 per cent in the 12 months to the end of June 2018.
This compares with 28 per cent in the previous 12 months, LCP stated.
Take-up rates continue to be highest for older members, with 37 per cent of members aged 55 and over opting to cash out their pension.
According to LCP, more than £65m was paid out for quotes provided in the second quarter of 2018, with an average size of £401,000.
This compared with the £92m paid out in the first quarter of 2017, the peak for quotes provided, when the average size reached £627,000.
The average transfer value taken in the year to the end of June was £394,000, about 1.5 times the average price of a house in the UK.
The consultancy firm also noted that transfer values requoted within a 12-month period tended to have higher take-up rates.
Of the quotations that were calculated twice within the 12-month period to the end of June, 76 per cent were paid out.
Last May, the Financial Conduct Authority disclosed that the value of money transferred from DB to defined contribution schemes had leapt to £20.8bn in 2017 from £7.9bn in 2016.
However, new rules for advice in this sector introduced by the FCA in October – such as the introduction of a transfer value comparator (TVC) - are expected to prevent more savers from cashing in their pensions.
Paul Gibson, managing director at Granite Financial Planning, said: "Whilst we are not active in this market we do receive enquiries and these have definitely tailed off when everyone seemed to be asking about them a year or so ago.
"I just hope that the ones that are opting to transfer are doing so for the right reasons and we are not storing up another compensation bill."
maria.espadinha@ft.com
