The number of defined benefit transfer requests has dropped in the past quarter but the average value still rocketed to above £500,000.
According to consultants LCP, the average DB transfer in the three months to June was £556,000, up 30 per cent compared with the first quarter, and the first time in three years it has exceeded half a million pounds.
The firm said the figures indicated the DB transfer market was moving to a smaller number of higher-value transfers.
Among the 80 schemes administered by LCP, about one in five individuals who had received a transfer value quotation completed a transfer out in Q2, the lowest take-up rate since 2016.
There was also a sharp reduction in the number of transfer quotations in March, April and May, with the rate of requests falling to less than half of its pre-lockdown level.
In June requests picked up but after peaking in mid-June they settled back and are currently running at about 75 per cent of pre-lockdown levels.
LCP said this could be a result of individuals’ unwillingness to make major financial decisions in the midst of the Covid-19 lockdown period, as well as guidance from the Pensions Regulator which allowed schemes to take longer when processing pension transfers.
The firm also found quotation rates continued to be highest for those aged 55 and over.
Around 8 per cent of members aged 55 and over requested a transfer quotation in the year to June 30, 2020, compared with 3 per cent of members under 50, with an average quotation amount of £315,000.
Bart Huby, partner at LCP, said: “It’s no surprise that this quarter has seen such a dip in pension scheme members asking for quotations or taking up quotations they had already received, given that it coincided with the height of the pandemic.
“But it seems as though those with the largest pensions have been the least likely to be put off from completing a transfer.”
But Mr Huby has warned a crackdown by the regulator in this area could dampen growth.
He said: “While the Covid-19 impact is ongoing, the transfer market is about to enter into very new territory as the FCA’s ban on ‘contingent charging’ comes into effect in a few weeks.
“This could have a big impact on the number of quotations requested. It may also make it harder for members to get the right advice as we expect it will lead to many advisers leaving the market.”
In June, the Financial Conduct Authority published its latest policy statement confirming it would continue with its crackdown on the DB transfer advice market and ban contingent charging, in most circumstances, from October.
The regulator also introduced proposals to allow advisers to provide an abridged advice process which it says “will help consumers access initial advice at a more affordable cost”.
But there are concerns many advisers will leave the market due to the extra pressures, making it even more difficult for savers to get access to DB transfer advice, something which is mandatory on transfers over £30,000.