UK pension investments jump by over third in Q1

Added 19th June 2017

New pension investments in the UK were up by more than a third in the first three months of 2017, according to new figures by Equifax Touchstone.

UK pension investments jump by over third in Q1

Research by the intermediary databased provider, which covers 90% of the UK’s life and pensions companies, found that retirement investments (excluding transfers) jumped to £6.8bn in Q1 2017 from £5bn ($6.4bn, €5.7bn) in the last quarter of 2016.

The figure nearly doubles to £12.7bn when you include pension transfers, which grew by 30% compared to the previous quarter.

New inflows from pensions into investment for the first three months of the year were more than twice as high, year-on-year, increasing by 55% from the £4.4bn report in Q1 2016.

Equifax Touchstone said the spiralling rates “highlighted ongoing investor desire to switch to products that better suit their retirement needs”, with transfers across all products rising by 23% to £5.6bn.

This was most evident in pension transfers into self-invested personal pension schemes (Sipps), which saw inflows surge by 17% to £3bn in Q1 2017 compared to the previous quarter.

Total Sipp sales for the quarter were up 25%.

DB transfers 

John Driscoll, director at Equifax Touchstone, said financial advisers are receiving record requests from clients looking to transfer their final salary pension scheme – a trend he expects will continue in the long term.

“Advisers are receiving increasing requests from clients to opt out of their final salary scheme. As investors continue to weigh up the benefits of a guaranteed final salary pension, versus flexible access to their retirement savings, it’s likely this behaviour will follow through into the next quarter.

“Pension transfer volumes will continue the upward trend as ‘insistent clients’ give greater weight to flexibility in their financial planning,” he said.

On Monday, research from Royal London revealed the value of pensions being transferred out of defined benefit (DB) schemes is now greater than the average cost of a house in the UK, with average transfer value between £250,000 and £500,000 ($639,405, €570,998).

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Monira Matin

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Monira joined International Adviser in March 2016 from Informa Global Markets where she worked as a eurobond reporter for over two years, covering fixed income markets. She has previously held a number of editorial positions covering politics, insurance and technology. Monira has a degree in Journalism and Economics from City University.

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