Partial option
On Monday, Standard Life called for a partial transfer option to be made a mandatory requirement in the FCA’s upcoming DB regulations.
They argue this would ensure consumers have greater flexibility in what they do with their retirement income and enable advisers to tailor their advice to deliver a better outcome for their clients.
Rather than the “all or nothing” approach of either full transfer or no transfer, a partial transfer could be the best option in many instances.
Alastair Black, head of financial planning propositions at Standard Life, said: “The DB to DC conversation isn’t going away. So far it has been very black and white, but it doesn’t have to be ‘all or nothing’.
“For many the flexibility of freeing up their pot of DB money is very attractive, but the challenge is giving up the guarantees offered by a DB pension.
“However, with a partial DB to DC transfer they could have a mixture of both, retaining some guaranteed income with the scheme, while taking some risk to provide the greater flexibility they are looking for. This could be a really good solution for many retirees.”
Pension transfers surge
Since the introduction of the pension freedoms in April 2015, consumers have more options available to access their pension savings.
This, combined with recent economic and legislative changes and the introduction of pension freedoms, has resulted in a big increase in individuals seeking pension transfer advice.
Defined benefits solvency concerns have also played a role in driving clients into Sipps and out of defined benefit pensions schemes.
