Data from Origo’s Options Transfers service showed that between March 2014, when the Pensions Freedoms were first announced, and March 2016, there was a 115% rise in pension to Sipp transfers.
Pension to pension transfers increased by 74%, while, in contrast, pension to annuity transfers went down 77% in the same period.
For pension to Sipp and pension to pension, as many pension transfers have taken place in the six-months to 30 September 2016, as were transferred in a full year before the freedoms announcement.
With over 89 brands using Origo’s Options Transfers service, the not-for-profit firm reported it had transferred over £85bn since launch in late 2008.
There was a shift in the peak ages at which people were transferring their pensions – from age 60, (followed by 55 and 65) pre-April 2015, when the freedoms came in, to age 55 (followed by 65 and 60) over the past 18 months.
Paul Pettitt, managing director of Origo, said: “Origo’s Options Transfers figures reflect the significant change in the market since the new pensions rules were announced in then-Chancellor George Osborne’s 2014 Budget speech.
“Annuity transfers fell dramatically almost overnight and it was anticipated that more flexible products that provide income as well as ongoing investment, such as Sipps, would benefit as a result.
“The surge in overall volumes since March 2014 would suggest the Pensions Freedoms have had a major impact on the way people engage with their pensions and has prompted them to take action. This may have been to consolidate their pension pots, and/or move them into more flexible pensions products, allowing them to take advantage of the changes in legislation and giving them greater control over their retirement pots."
Average size of pension pots transferred over a full year/half year:
Pension to Sipp: £57,245 (03/15*) £58,015 (09/16)
Pension to pension: £45,950 (03/14) £50,449 (09/16)
Pension to drawdown: £44,657 (03/14) £51,523 (09/16)
Pension to annuity: £32,898 (03/14) £41,204 (09/16)
* figures n/a for 03/14