13 November 2018
The latest quarterly analysis show that quotation rates have dipped since Q2 2018 and further below the record level of activity in 2017:
- The rate of quotation requests fell to 1.6% of deferred members in Q3 2018 compared to 1.7% in Q2 2018 and 1.9% in Q3 2017 – though this is still nearly three times the level in 2014 before the introduction of freedom and choice.
- The number of payments in respect of quotations given in Q1 2018 (the latest quarter for which all transfers have now been paid out) was 46 payments per 10,000 members. This is the lowest payment rate since Q3 2016 and is significantly lower than the all-time high of 66 payments per 10,000 members in Q3 2017.
- Around a quarter of the schemes included in our analysis include an estimated transfer value in the retirement packs provided to members. 16% of members aged over 55 in these schemes requested transfer values between 1 April 2017 and 31 March 2018, compared with 12% of members in other schemes. Furthermore, 44% of these quotes were paid, compared with 33% in other schemes.
The High Court ruling relating to the Lloyds Banking Group GMP equalisation case has a significant implication for most UK defined benefit schemes on many fronts including transfer value payments. The update covers some immediate considerations for trustees.