For the first time since the beginning of 2017, the funds transferred out of occupational pension schemes has decreased.
Data from the Office for National Statistics (ONS) shows individuals transferred out £8.2bn between April and June, which is down from £10.6bn in the previous quarter.
It is thought the majority of the transfers are from defined benefit (DB) pension schemes, and that people may have been transferring their DB pensions into defined contribution (DC) schemes in order to benefit from the pensions freedoms introduced in April 2015.
Product technical manager at Nucleus, Rachel Vahey, suggested the decrease in transfers could be a result of a number of reasons. Namely:
Alan Chan, director and chartered financial planner at IFS Wealth & Pensions, said: “The increase in the base rate in August may have caused a further drop in transfer values from the heights we’ve seen over the past year or so.” He suggested this would make a transfer appear less attractive and so fewer people would be looking to transfer out of their existing DB pension scheme.