Defined benefit (DB) pension transfer value related activity fell "markedly" during the final quarter of 2022 amid the fallout from the mini-Budget, analysis from Barnett Waddingham has revealed.

The research showed that transfer value requests fell by 35 per cent compared to Q4 2021, while transfer payments fell by 50 per cent, as transfer values fell "sharply" amid the rising interest rates.

It also found that only four bulk transfer exercises were undertaken in the second half of 2022, the lowest of any half year since the analysis was launched in 2019.

In addition to this, one of the independent financial advice firms that specialised in partnering with DB pension schemes on transfer value and other liability management exercises, has now exited the market, due to commercial considerations.

Reflecting on the findings, Barnett Waddingham suggested that the fall in activity was primarily driven by the fallout from the mini-Budget, particularly rising inflation and volatility in the gilt market.

However, with transfer values now stabilising again, the company said that there could be an increased interest from individuals looking to their pensions for options to help support their retirement plans, suggesting that trustees may need to review their transfer value basis.

Barnett Waddingham partner, Liam Mayne, stated: “Many schemes’ funding and investment strategies have been revised in light of the events during 2022. Market conditions are also seemingly stabilising.

“Given this, trustees should consider reviewing the transfer value basis to ensure it remains appropriate. Trustees and sponsors may also need to consider their transfer value processes more generally considering the declining member interest in the option.

“Those schemes with journey plans that have baked in a certain level of take-up of transfer values may want to revisit these, as well as their overall approach to supporting members with ever trickier retirement decisions following the turmoil of 2022 and the ongoing cost-of-living crisis.”

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