Defined benefit (DB) pension transfers volumes doubled last year to £21 billion as the number of IFA firms active in the market has continued to increase.
Financial Conduct Authority (FCA) figures released under a freedom of information request by the Financial Times showed the value of DB to defined contribution (DC) transfers rose from £7.9 billion in 2016 to £20.8 billion in 2017.
The number of transfers in 2017 was 92,000, up from 61,000.
The FT's FOI also broke the numbers down showing that £5.5 billion was transferred out n the fourth quarter of 2017 compared to £2.5 billion over the same period on 2016.
The figures tally with an estimate of 100,000 transfers made by The Pension Regulator earlier this month, which it reckoned to be worth to £14.3 billion.
The rise in transfer volumes is in step with a rise in the number of advisers who have gained permission to carry out transfers over the last few years.
In March New Model Adviser® revealed advice firms with the power advise on DB pension transfers had increased by 30% since the pension freedoms came into force.
According to FCA data obtained by New Model Adviser®, the number of financial adviser firms, not individuals, that have permission to advise on pension transfers/opt-outs (the permission required to conduct DB transfers) rose from 2,231 in April 2015 to 2,895 as at February 2018. An increase of 664 firms.
The Financial Services Compensation Scheme (FSCS) also blamed a rise in claims relating to DB transfers over the past year for a increase in its levies.
The FSCS announced a £52 million increase in its levy on life and pensions advisers at the start of May it said had been contributed to by DB transfer advice claims. This includes £10 million the FSCS has set aside for claims against a number of IFAs.
In January the FCA announced every firm with permission to advise on DB transfers would be asked to provide data as part of a probe into practices across the market.
Last year the regulator assessed advice from 13 firms that were offering DB transfer advice. Out of the 88 client files it looked at, the FCA found less than 50% could be judged as suitable advice. A further 45 firms were then asked to provide information about DB transfers.
South Wales-based advice firm Niche IFA took the decision to temporarily close its doors to DB transfers last November after being 'overwhelmed' by requests for advice by British Steel Pension Scheme members, who had a December deadline to make a decision. Listen to our interview with Adams about DB transfer advice and the British Steel Pension crisis in our podcast below: