The amount of people transferring from defined benefit to defined contribution pension schemes has increased almost sevenfold in two years.

A freedom of information request to the Financial Conduct Authority (FCA) revealed that a total of 5,056 people transferred in the six months to March 2016, rising to 34,738 people in the six months to March 2018.

The data, extracted from the Retirement Income Data Request (RIDR), showed a steady increase over six month periods, with April to September 2016 producing 6,130 requests, 13,024 between October and March 2017 and 23,806 between April and September 2017.

Collected from a sample of 54 firms, the data covers both contract and trust-based schemes.
The FCA said it covers around 95 per cent of the DC contract-cased pension scheme assets.

From October 2018, RIDR will be replaced by REP015 and REP016, which will cover the entire market and is likely to result in a steep rise in pension transfers.

Earlier this month, research from LCP found that DB transfers have fallen to 1.6 per cent of deferred members in Q3 2018.

LCP’s quarterly review of the transfer experience for the schemes it administers found they had fallen from 1.7 per cent in Q2 2018 and from 1.9 per cent in Q3 2017.

However, this is still almost three times as much as the level it was at in 2014, before the introduction of pension freedoms.

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