FCA publishes retirement data

There are few, if any, financial decisions as important as deciding what to do with your pension. Nowadays there are so many choices, but the factors that influence the path you choose are complex and should only ever be undertaken in full knowledge of the various options available as well as their many implications.

For example, significant numbers of UK citizens abroad are likely to benefit from an expat retirement transfer, but converting a defined benefit (DB) scheme into a QROPS or SIPP should never be undertaken without reliable and impartial advice that takes full account of the retirement saver’s circumstances.

Unfortunately, it can be difficult to find an expat financial adviser who understands all the regulatory and cross-border wealth planning issues at stake.

Back in 2018 the Financial Conduct Authority (FCA) reported that advice was suitable in fewer than 50% of pension transfer cases – a figure that fell significantly short of the 90% mark recorded in other areas of the consumer financial advice sector.*

Pension Transfer Advice Still Lacking

As a result of the 2018 findings the FCA carried out analysis of a significant amount of data to help it comprehend the defined benefit pension transfer advice market more clearly.

The FCA has now published details of pensions advice carried out by 3,015 advisory firms between April 2015 and September 2018 on pensions worth a total of £82.8 billion, with an average of individual pension value of £352,303. Interestingly, the watchdog found that 162,047 individuals – accounting for nearly 70% of clients – were advised to transfer out.*

Curiously this figure includes not only UK expat retirement transfers, but also those that relate to UK residents, a demographic that may be less likely to benefit from a transfer into a QROPS or a SIPP.

“We have said repeatedly that, when advising on DB transfers, advisers should start from the position that a transfer is not suitable,” commented Megan Butler, the executive director of supervision, wholesale and specialists at the FCA.*

Butler added that it is deeply concerning and disappointing to see that transfers are still being recommended at similar levels.

Reliable advice for one of life’s most important financial decisions

Choosing whether to undertake an expat retirement transfer is one of the most important, yet complex, financial decisions you will ever have to make. As such, it is essential that you receive reliable, regulated and impartial advice which takes full account of your cashflow needs, retirement goals, time horizon and cross-border situation.

Blacktower Financial Management provides clients with world class and independent financial advice, to help them determine whether an expat retirement transfer really is in their best interests.

We always work with our clients’ best interests in mind and are committed to providing a transparent, professional and attentive service, whatever your financial advice requirements.

For more information about how we may be able to help you achieve your retirement goals, contact your local Blacktower Financial Management office today.

* https://www.fca.org.uk/publications/multi-firm-reviews/defined-benefit-pension-transfers