Second lockdown coincides with another drop in transfers quoted, but transfer payment activity remains largely unaffected.

• After an uptick in transfer activity in Q3 2020 as we emerged from the first lockdown, transfer quotation rates decreased by 11% over Q4 2020 to 116 quotations per 10,000 deferred members.
• Of the 365 quotations issued in Q2 2020 – the quarter with the lowest quotation rate since Q2 2016 and the most recent quarter with complete payment data – 26% (94) were subsequently paid out. This represents an increase from 21% in the previous quarter and is the highest take-up rate seen since Q3 2018.
• Despite there being 117 fewer quotations issued in Q2 2020 than in Q1 2020, only 8 fewer payments were made in respect of the Q2 quotations. This could suggest that, while more speculative transfer quotation requests were put on hold during the first lockdown, members who were serious about transferring were not deterred by the market volatility and general turmoil of this period. The higher take-up rate could also point to increasing concerns about employer covenant strength and the security of a DB pension.
• Of the total value of transfers paid out in the latest quarter, 85% was paid to members in their 50s – this is the highest that this level has been since we started our analysis in 2014.

 Speak to our experts Bart Huby or Tim Camfield for more information.

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