There is a “concerning” lack of satisfaction among DB pension members who transferred to DC schemes, with only 68 per cent happy with their decision over the past four years, according to Broadstone.

Broadstone’s analysis of the Financial Conduct Authority’s (FCA) Financial Lives 2024, which was released last week, showed that this figure dropped to 64 per cent of those with a household income below £50,000.

Despite these low satisfaction levels, the FCA data showed that 12 per cent of people with a DB pension in accumulation are considering transferring into a DC pension, while 6 per cent said they did not know.

Of this cohort, 26 per cent believe they will proceed with a transfer but less than a third (32 per cent) have consulted a financial adviser about the implications of a transfer.

Broadstone head of redress, Brian Nimmo, said: “DB pensions offer security in retirement by providing guaranteed income no matter how markets behave or investments perform.

“It is for this reason that, ultimately, the majority of pensioners with DB pension guarantees will be better served staying within their scheme.

“The FCA’s data suggests this remains the case with fewer than seven in 10 transferors satisfied with the outcome of their transfer.”

However, he suggested that some members could see benefits from accessing cash faster from their DB pension, especially those at the smaller end of the spectrum, for a specific reason such as to pay off a mortgage or provide a gift.

“Regulations around transfer advice have tightened significantly in recent years, which should give those considering a transfer peace of mind that they will receive trustworthy and expert advice on whether this is a good idea,” he added.

The latest update to the Broadstone DB Redress Tracker showed that compensation levels have dropped “significantly” from a few years ago.

However, it also showed that compensation is still due in many cases, with each assessed on an individual basis.
 

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