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Press comment: Warning against drastic changes to pension savings during uncertain environment

29/04/2020

If you are covering the new guidance from The Pensions Regulator (TPR) for trustees to issue transfer warnings to DB members, please see the following comment from Ian Browne, pensions expert at Quilter:

“The new guidance for trustees to warn DB members of the risks of transferring during the pandemic is welcome as it is vital that pension savers do not do anything drastic with their nest egg and consider the options available to them very carefully.

“The sudden change in the economic landscape has created an environment which could tempt many DB pension holders to transfer to a DC pension. The fluctuations in bond yields and investment markets has increased potential transfer values, and many will be tempted by the opportunity to invest their retirement pot in a depressed market.

“But the economic outlook is still extremely uncertain, and the relatively high transfer values should not be an automatic reason for a member transferring out. The guaranteed income from a defined benefit scheme should not be downplayed and a transfer will only be in a members best interest in the minority of cases.

“Scammers are also taking advantage of the unprecedented environment to try and tempt savers away from their retirement funds. The FCA has warned consumers who are scammed lose an average of 22 years’ pensions savings, almost three times their annual earnings. Unsolicited cold-calling about pensions has been made illegal, but the risk of pension scams remain.

“If members are still leaning toward a transfer, they must remember that in doing so they take on the investment risk, which is particularly challenging in the current market uncertainty. Even if members have a professional adviser, who carefully selects and monitors their funds, the volatility within the markets will have an impact.

“It is also worth remembering that the money isn’t accessible right away. The pension transfer process can take months and The Pensions Regulator has recently relaxed some of its requirements on schemes so transfers may take longer, or it may take longer to get a quote for the value of that pension.”

For more information contact

James Ventress020 7002 402507884 753012james.ventress@quilter.com

Notes to Editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £95.3 billion in customer investments (as at 31 March 2020).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform and Quilter International, including AAM Advisory in Singapore.

The Old Mutual Wealth Heritage life assurance business was acquired by ReAssure Group Plc on 2 January 2020.

Since its IPO in June 2018, Quilter plc’s businesses have progressively rebranded to Quilter, as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Quilter Financial Advisers (previously Charles Derby Group)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Investment Platform in 2020)
  • Quilter International (previously Old Mutual International)

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.