Transfer value experience – Q2 2022

We have analysed defined benefit (DB) cash equivalent transfer values (CETVs) over the twelve months to 30 June 2022. 

The large fall in transfer value amounts over the quarter and year is due to significant increases in gilt yields over the period. This follows the Bank of England’s decision to increase interest rates in response to the current high levels of inflation.

Due to these inflation increases on everyday goods and spiralling energy prices, a higher proportion of the members IFAs speak to are looking to access their pensions earlier and in greater amounts. These (hopefully) short-term pressures are driving behaviour that will impact on members’ long-term incomes and so should potentially be treated as Vulnerable Customers.

"Many members will be concerned with reports of a cost of living squeeze in 2022 and could look to their pension for some degree of financial relief. Members should be on guard for scammers."

Trustees should ensure that their administrator has implemented new procedures to assess whether they should refuse a transfer value that is at risk of being a scam and that the procedures are in line with the latest guidance from TPR and DWP. 

For more information, download our briefing note today.