Better support and advice could boost retirement income for transferring members by 15%, XPS Pensions Group finds
Better support and advice could boost retirement income for transferring members by 15%, XPS Pensions Group finds
08 Dec 2022
- Receiving vehicles are delivering better value for money, with fees falling by around 10% since 2018
- Better support could see members enjoy 15% more income in retirement every year
Access to better support and advice could help those who transfer from defined benefit schemes receive up to 15% more in income per annum, a survey from XPS Pensions Group has found.
XPS Pensions Group’s annual Member Outcomes Survey found that where schemes offer at-the-point-of-access support – such as help with obtaining quality financial advice and signposting to low-cost products – transferring members are able to generate more out of their savings.
A greater number of schemes are taking action to help members, with 64% of members covered by the survey now having access to enhanced support or an increased range of options, up from 50% in 2021.
Overall, the value for money available to transferring members has improved since the survey was launched, with average fees in receiving arrangements falling around from 1.9% p.a. in 2018 to 1.7% p.a. this year. This 10.5% reduction in fees could see members’ savings last for up to one year longer in retirement. However, enhanced support could help reduce these fees significantly, with the potential to make funds last a further 8 years or enable an income 15% higher to be drawn each year.
Mark Barlow, Head of Member Options at XPS Pensions Group, added “Ensuring members’ finances are in good health at retirement starts with good advice and support. In the midst of the cost-of-living crisis, schemes should be doing what they can to help members make good decisions about their finances. And with around one million members expected to retire or transfer over the next 5 years, now really is the time to act.”
The findings are the result of analysis of over £3.5bn in pension transfers, covering over 13,000 transactions over the last five years.