Number of savers transferring pensions soars

The number of savers transferring out of their Defined Benefit (DB) pension schemes has increased by 25 per cent, according to a new report.

Insurer Royal London, which published the findings, said retirees should always seek independent advice before making life-changing decisions.

The figures show that 100,000 people chose to transfer out of their DB pension scheme last year, compared to around 80,000 the year previously.

The average size of the pot being transferred has fallen, however, falling to £200,000 last year from £250,000 the year previous.

Steve Webb, director of policy at Royal London, said: “Large numbers of people are still transferring out of traditional salary-related pensions, but whether this is a good idea or not depends crucially on your individual circumstances.

“For most, a guaranteed salary-related pension that lasts as long as you do, and is unaffected by the ups and downs of markets, will be the best answer.

“For some, who want extra flexibility or are focused on passing on some of their pension wealth, a transfer might be the right answer. It is vital to take, and listen to, impartial financial advice before making a big decision of this sort.”

The insurer said that the recent spate of collapsed pension funds may be adding to savers’ worries.

Thinking about transferring your pension? Make sure you get independent advice from a reputable advisor. For more information, please get in touch.