There has been a significant drop in the number of pension savers who have been advised to transfer out of their DB scheme, according to new FCA figures.
These figures were published in in response to a Freedom of Information request from Kroll Financial Services. The total number of customers advised to transfer in the 18 months from April 2020 to September 2021 was 34,053. In the preceding 18 months — from October 2018 to March 2020 — this figure was 49,456. This represents a fall of 31 per cent.
Kroll Financial Services said these figures indicate that intervention from the FCA on this issue appears to be working.
However, the figures show that almost two thirds of clients requesting seeking advice on DB transfers are still advised to move out of these schemes.
Kroll Financial Services managing director Mark Turner says: “According to the data the number of customers advised to transfer out of their DB pension scheme in 2021 was far lower than in previous periods. Reducing this figure has been a key aim of the FCA, so it’s positive to see that regulatory intervention seems to be working.
“Despite this, the percentage of customers being advised to transfer does still remain high – close to two thirds. This, however, could simply mean that the triage process is working as intended and that customers who previously might have been advised not to transfer are now simply not progressing past the initial guidance phase to receive full advice.”
The graph below shows the number of customers advised to transfer out of DB schemes.
Turner adds: “While the initial data looks positive, we also need to consider the potential risk posed by unintended consequences. If more regulatory attention means that advisers withdraw from this market and no longer offer transfer advice, then consumers could start to suffer. If the market shrinks, then customers simply may not be able to get access to high-quality and affordable transfer advice in the future. We may need to wait a little longer to fully grasp the long-term effects.”
