Pension Transfers from UK Defined Benefit Schemes Hits Record High.

Figures released by the UK’s Office for National Statistics shows that pension transfers have hit a record high in the first quarter of 2018, up from the previous record set in the forth quarter of 2017.

Although these numbers account for all pension transfers, it is thought that the vast majority of the pension transfers are from people transferring out of defined benefit (DB) pension schemes. This is likely due to of a combination of several factors.

Concern around deficits in defined benefit scheme and the number of schemes that are going into the PPF (Pension Protection Fund) is causing members to transfer their pensions. Coupled with the collapse of several high-profile companies have further raised concerns around the viability of DB schemes. As a result, more people have chosen to move their pot away from the security of traditional DB schemes in favour of more flexible contribution plans.

The introduction of pension freedoms allows savers to access their pension savings at any time from the age of 55, and created more flexibility to make their own decisions about how to fund their retirement. 

Those with high transfer values have a further incentive to exit out of DB scheme. By exiting out of DB schemes, savers are able to retain greater autonomy and control over their funds, instead of being limited to a financial product such as a fixed annuity. A fixed annuity being a product purchased using pension savings, in return for a fixed income stream for the duration of retirement.

No doubt the looming threat of Brexit and its impact on pension freedoms is also concerning those holding UK pensions. 

It should be noted that transfers are mostly UK to UK scheme transfers, as members look to de-risk their pension savings. With a slow down in international pension transfers over the last quarter, and concern that those less in the know about the state of the UK defined benefit schemes are being left behind.

If you are concerned about your pension and are looking to transfer into a New Zealand QROPS, Ranfurly Strategic offer a listed Superannuation Scheme, as well as an agent that can assist you through the transfer process, prepare transfer forms, and assist in obtaining the required UK and NZ advice that you need. The Ranfurly Scheme is listed on the UK Government Recognised Pension Schemes List.

To get in touch with Ranfurly, contact us by filling in this enquiry form.