Many savers opting out of '˜gold plated' pension deals

Large numbers of people have been transferring out of traditional 'gold-plated' pensions over the past year, figures obtained by a mutual insurer suggest.
By The Newsroom
Published 20th May 2018, 21:59 BST
Updated 8th Jun 2018, 08:37 BST
The average pot being transferred was just under £200,000The average pot being transferred was just under £200,000
The average pot being transferred was just under £200,000

A freedom of information (FOI) request by Royal London found an estimated 100,000 transfers were made out of defined benefit (DB) pensions between the start of April 2017 and the end of March 2018.

The average pot being transferred was just under £200,000, the figures suggest.The figures were given to Royal London by the Pensions Regulator.

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DB schemes promise people a certain level of income when they retire, such as final salary schemes.

But they have become rarer in recent years as firms have found them expensive to run as people live for longer.

Some people may have transferred to defined contribution (DC) pension schemes. This is the type of scheme covered by the pension freedoms, which give people greater flexibility over how they use their pension pot.

While DC schemes have this new flexibility, people are less certain about the size of their final pension pot.

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Meanwhile, some people transferring from DB schemes in the Pensions Regulator’s figures may have switched their pot from one DB scheme to another.

Sir Steve Webb, a former pensions minister now 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 people, 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.