New figures have revealed that the number of people taking advantage of the pensions freedoms has hit a new record.
According to figures from the Office for National Statistics, the first three months of 2018 saw pensions transfers reach £10.6 billion; this shows that use has drastically increased since the freedoms were introduced in 2016, when the figure stood at £2.4 billion.
Of these transfers, most will tend to come from people shifting to defined contributions (DC) plans, having made the move from the less flexible defined (DB) benefit schemes.
Whilst DC plans are less secure, as DB schemes provide an income for life, they have grown in attractiveness over the last due to a number of different factors.
Commenting on this was the senior analyst at AJ Bell, Tom Selby. He said: ‘We have witnessed a perfect storm for DB transfers in the UK, with a combination of the attractiveness of the pension freedoms, high transfer values and headlines about high-profile companies – most notably BHS and Carillion – going bust all undoubtedly influencing people’s decision to exit.’
