The typical value of defined benefit (DB) pension transfers is now greater than the average price of a house, according to research by Royal London.
The provider found the most common transfer value lay in the range of £250,000 to £500,000. By comparison, the average UK house price was £216,000 in March 2017.
The firm had surveyed more than 800 financial advisers, and found the vast majority of clients transferring were in their 50s, with the typical cash sum offered worth between 25 and 30 times the value of the annual pension given up.
The main resaons for transferring were:
- A Flexible income in retirement
- Large Transfer values at present
- Inheritance considerations
- Potential access to greater tax free cash
- To take benefits earlier than DB scheme allows
- To use money to pay off debts
- Because of ill health
- To pass on cash now rather than later
- Solvency concerns over scheme/employer
- To finance large one-off items e.g. holidays