Latest analysis shows ‘slow death of DB transfers’ with member interest plummeting to 7 year low – LCP

by | Dec 19, 2022

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Latest analysis of DB transfer activity by consultancy LCP shows evidence of a ‘slow death of DB transfers’, with the number of people asking for transfer quotations and following through with them falling to their lowest levels since 2015.

A number of factors are behind this slow down. Last year new anti-scam rules came into force which has led to more stringent processes around transfers.  In addition, many members of DB pension schemes report difficulty in finding a financial adviser as many IFAs have ceased providing DB transfer advice in recent years. 

However, the main reason lies in the sharp rise in government bond (gilt) yields over the past few months. This has led to a collapse in the values people are being offered, as a higher gilt yield environment means the amount of money a DB pension scheme needs to hold to pay a member’s pension in the future has fallen, and this feeds through into lower transfer values.  

There is clear pattern in the declining number of quotations issued and take-up of these quotes by pension scheme members. Across more than 75 schemes administered by LCP, the value of transfer quotations issued in Q3 2022 was the lowest total since Q1 2015, whilst only 15% of transfers quoted in Q1 2022 were taken-up, the second lowest rate in 7 years.


The average quotation size in Q3 2022 was £252,000, down 24% from £330,000 in Q2 2022. This is the lowest figure for over 7 years and coincides with the sharp rise in government bond (gilt) yields.

LCP predict that there will be further falls in take-up rates as average transfer values quoted in the final quarter of this year are expected to fall further as a result of continuing high gilt yields.

Other findings in the analysis were:

  • In Q1 2022 the top 25% of the market (corresponding to quotations over c£540,000 in Q4 2021, and those over c£365,000 in Q1 2022) have since seen the biggest fall in take-up rates from 50% in Q4 2021 to 25% in Q1 2022.
  • Quotation rates continue to be highest for those aged 55 and over.  Around 7% of members aged 55 and over requested a transfer quotation in the 12 months to 30 September 2022, compared to less than 3% of members under 50.
  • The average transfer value taken in respect of quotations in the 12 months to 31 March 2022 was £496,000 – just under twice the average price of a house in the UK during this period.
  • For quotations made in Q1 2022 – the latest quarter with complete payment data – the average transfer value paid was £441,000, down 29% from £617,000 in the previous quarter.  This is the second lowest figure since Q2 2020 and coincides with a low average quotation size of £297,000 in Q1 2022.

Jim Little, Partner at LCP, commented:

“We are witnessing the slow death of DB transfers. In the last three months, interest in transfers in terms of people asking for quotes has been at its lowest level since the introduction of pension freedoms in 2015.  We are also seeing very low take-up rates, with just 1 in 6 quotes taken up in the first quarter of this year, the second lowest figure since 2015.  The biggest single reason is likely to be the collapse in transfer values being offered, caused primarily by changes in interest rates in the last year.  But there was already a downward trend as anti-scam legislation has slowed up the DB transfer process and as members often find it hard to source a financial adviser, with many advisers having left the market in recent years”.

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