Sunday 29 April 2018
Final salary pension transfers are grinding to a halt following curbs by the City watchdog and insurance companies’ fears of an impending mis-selling scandal.
At the same time, the portfolios of the hundreds of thousands who have already transferred have begun to suffer as a result of recent stock market falls.
As more cases emerge of savers who regret giving up gold-plated pensions, access to the “pension freedoms” is being restricted. It is thought that since 2015, about a quarter of a million people have swapped guaranteed “final salary” pensions for “defined contribution” plans that allow far greater flexibility under the pension freedoms rules.
Transfer values have been incredibly generous – a £10,000-a-year pension can become £350,000 or more in cash – because of low interest rates. But the Financial Conduct Authority is worried people have been too quick to give up guaranteed retirement income and may run out of cash.
Tideway's James Baxter comments in this article, which you can read by following the link below.