Pension transfer values outstripping UK house prices


A royal London survey has found that Pension transfer values outstripping UK house prices.

Research from Royal London has found that the value of pensions being transferred out of defined benefit (DB) schemes is greater than the average cost of a house in the UK.


Royal London said that a survey of 800 UK financial advisers found that the most DB transfers are valued between £250,000 and £500,000.


This compares with an average house price in the UK of £216,000 as of March 2017.


Average statistics

The vast majority of clients transferring are in their 50s, and the typical cash sum offered is between 25 and 30 times the value of the annual pension given up.


When asked the main reasons why people who have received advice want to go ahead with the transfer, the following were the top five reasons:

  • The ability to provide more flexible income in retirement
  • Large current transfer values
  • Inheritance considerations
  • Access to greater tax-free cash
  • To take benefits earlier than in the DB scheme.


Whilst the case for Irish transfers has become more compelling and attractive to a wider group of people some believe that staying in a defined benefit pension will also be the best option if:


  1. You are attracted to a secure lifetime income, delivered with very limited risks.
  2. If the defined benefit scheme will be your main source of income in retirement.



Commenting on the findings, Royal London director of policy Steve Webb said: “It is clear that large and growing numbers of people are choosing to exchange the promise of a regular pension in retirement for a large cash lump sum.

“For some people, the value of their pension pot will be greater than the value of their house. This makes it all the more important that people think very carefully before making a transfer, and take full account of independent financial advice before making such an irrevocable decision.”


Standardisation needed

Advisers also expressed frustration with the length of time it can take to obtain information from schemes in order to provide proper advice on transfers.

Around 500 of the 800 advisers who responded said they “sometimes or often” had to get a new transfer value quote because the three-month window of validity had lapsed before the advice process could be properly completed.

Seven out of eight said that they “strongly supported” an initiative by Royal London to press for standardised information to be supplied by schemes alongside transfer value quotes.

Webb added: “There is no doubt that the ability to transfer a Defined Benefit pension into a more flexible format is very attractive, provided that the decision to transfer is based on good quality independent advice. But sometimes the process takes far too long, through no fault of the adviser.

“We need a system where pension schemes provide on day one all of the information needed to decide if a transfer is a good idea or not. This would make life a lot easier for schemes, advisers and, most importantly of all, consumers.”


So if you are the holder of a UK final salary pension scheme and would like to discuss the options available to you then please do contact us for further information.

If you would like to consider some Irish options we can assist you with our regulated company, Windsor Wealth Management Limited trading as




Johnny Mulholland

Managing Director

International Pension Transfer Consultants Limited

29 Windsor Place, Dublin 2, Ireland

Phone +353 (0)1 6815293



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