Pension transfers reach record £10.6bn in Q1

The figures show the value of pension transfers in 2017 was revised up £2.5bn to £36.8bn.

Tom Selby, senior analyst at AJ Bell, said the “vast majority” of these transfers were likely to be people quitting guaranteed defined benefit (DB) schemes to transfer to defined contribution (DC) alternatives.

He added that these figures confound predictions that DB transfers had peaked in 2017 and notes the numbers could reflect significant transfers from large schemes such as the British Steel Pension Scheme.

He said: “We have witnessed a perfect storm for DB transfers in the UK, with a combination of the attractiveness of the pension freedoms, high transfer values and headlines about high-profile companies - most notably BHS and Carillion - going bust all undoubtedly influencing people’s decision to exit.”

Selby added: “Over time pensions transfer volumes should edge downwards as the number of people with significant funds eligible for a transfer diminishes, but as things stand we remain in the eye of the storm.”

In April, HM Revenue & Customs data showed savers withdrew £1.7bn using the pension freedoms in the first quarter of this year.

According to HMRC, there were 500,000 payments made to 222,000 people over the period which took the total amount of money withdrawn since the pension freedoms started in April 2015 to £17.5bn.