Baby-boomer demand could cause pension transfer rise

Demand from so-called ‘baby-boomers’ means that the positive pension transfer forecast is likely to continue.

This is according to consultancy Willis Towers Watson, who predict that the rise in pension transfers is unlikely to subside, despite the rise in base rate last year. The consultancy attributes the positive outlook to the impact that gilt yields and the interest rate rise could have on schemes, potentially leading to a fall in liability and in turn, transfer values.

Sharing his thoughts on pension transfer trends for the year ahead was Peter Rowles. The UK retirement practice head at Willis Towers Watson stated: “It could be argued that with interest rates rising and gilt yields improving, schemes will start to see a reduction in their liability figures which could correspondingly lead to lower transfer values being offered to members, reducing the temptation for individuals to transfer out of a secure DB pension. But the indications are that interest rates, although rising, will do so slowly and I think this is unlikely to have an immediate impact on transfers in 2018 – we are going to continue seeing significant numbers of employees exiting their defined benefit pensions this year.”

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