Survey: New rules
for pension transfer advice -how generous are transfer values?


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See how transfer values differ across schemes when looking through the lens of the new TVC.

For the first time, our survey will enable trustees and employers to benchmark their own scheme's transfer values compared to other schemes.

The survey results are striking. How generous are transfer values?

  • For members ten years away from retirement, the transfer value on offer will on average only be around 55% of the ‘full value’ of the pension given up, according to the FCA methodology.
  • The range of transfer values offered by different schemes is very large – with some schemes offering transfer values as little as 40% of the 'full value', and others offering transfer values of more than 80% of the 'full value' – there are good reasons for this, but it may come as a surprise to some members of schemes.
  • For members within a year of retirement, the transfer value on offer will typically be higher, with an average transfer value being around 75% of the ‘full value’ of the pension given up.
  • As well as typically increasing as members become older, the generosity of transfer values is likely to drift up over time, other things being equal. This is because most occupational pension schemes are gradually changing their investment mix towards lower risk and lower return assets. This makes it more expensive to provide pension benefits and therefore increases the amount schemes are willing to pay someone who is prepared to transfer out.

This defined benefit transfer value comparator survey looked at over 200 schemes from a wide cross-section of UK pension schemes, across all industries, with scheme sizes ranging from less than £100m to more than £10bn.  

This research has also been referenced in a joint policy paper with Sir Steve Webb at Royal London.


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