Old Mutual Wealth has advised an increase in the number of defined benefit pension transfer requests in recent months. In fact they have mentioned an increased boost of advisors that are submitting cases to their defined benefit pension transfer value analysis service as a result. If you haven’t been keeping up to date with the latest trends, then you can read below what is prompting so many people to make this major decision to transfer their defined benefit pension in order to secure more money for their future.
Since pension freedoms were introduced in April 2015, Old Mutual has reported a rise for defined benefit pensions. People who hold a defined benefit pension that is worth £30 or more need to get advise from an advisor before then do any transfers. They need to have accurate and effective advice to ensure that they are making the best decisions for their financial futures and this has resulted in more people seeking the assistance from professional and experienced advisors regarding their defined benefit pensions.
The figures speak for themselves with Old Mutual Wealth reporting that there was just shy of sixty five percent increase in requests which were seen between 2015 and 2016. This followed a just over ninety percent increase which was experienced between 2014 and 2015.
This is due to the fact that the CETV (Cash Equivalent Transfer Values) are high when compared to the averages in the past. This has resulted in more clients requesting more than one transfer value in 2016 as they could access more money as a result. Of course clients are going to try and get as much as they can for their pension, they are securing their futures and advisors were helping them access a larger sum as the cash equivalent transfer values remained high that year.
Historical averages showed that transfer values could range from anything from twenty to twenty five times more in value of the defined benefit. This isn’t for every case, which is why clients need to seek professional and qualified advice. The amount is determined on the individual and the scheme that they are signed on.
Since then the cash equivalent transfer values have continued to increase and it is now quite normal to see values of up to thirty five times more notional annual value of the defined benefits pensions. This has resulted in a high influx of people looking to transfer their defined benefits pensions in order to get more out in the long run.
There are risks involved in transferring out of a defined benefit pension and it’s imperative that anyone considering to take this step seek professional advice before making any final decisions to ensure that they do understand what is involved and the possible risks that they could encounter as a result.
Old Mutual Wealth has advised that no one should ever go through with a defined benefits transfer without knowing the risks involved. An assessment should be made regarding the positive and negative impacts of the transfer and the overall financial circumstances of the clients before any major decisions to go ahead are made.
A defined benefit pension transfer can be the perfect choice for some people and definitely be the best financial decision that they make, but at the same time it can lead to someone making a bad decision and finding themselves losing the secured income that they wee expecting which can put them at financial risk at a later stage.