XPS Pensions Group has revealed 70,000 defined benefit (DB) members are exercising pension freedoms each year, suggesting more education is needed to ensure better member outcomes.
Results from its second annual survey on member outcomes under freedom and choice tracked 1,800 transfers between June 2018 and March 2019, adding to the 6,000 transfers reported the previous year.
The average transfer value also rose over 15% to £275,000, from £235,000. The report also revealed £500m of transfers have now taken place.
The firm's survey revealed around 70,000 eligible members are leaving their occupational pension schemes, with 99% moving to a self-invested personal pension (SIPP).
XPS' paper investigated the actions employers and trustees are implementing to help members with their choices and improve outcomes. It revealed 40% have implemented or are considering implementing a communications strategy, while 30% are actively investigating partial transfer options. It also found 25% are looking at introducing low-cost receiving vehicles for members, while just 10% have an IFA in place at retirement.
XPS principal Wayne Segers commented: "With so many members leaving DB schemes, there is no time to wait on providing clear robust support to help them understand the consequences of their options.
"New Financial Conduct Authority guidelines are driving better support from advisers but trustees and employers have a vital role to play in initial education."
The survey also highlights the impact that charges can have on member outcomes, suggesting members that choose more expensive vehicles could run out of money seven years earlier than those choosing lower cost alternatives if 25% tax-free cash is taken.
Segers added: "A one-size-fits-all destination is unlikely to drive the best outcomes for all members. Some members may be paying for features they don't need or use. Charges can have a devastating effect on members' retirement incomes.
"Lower cost, simpler SIPPs and master trusts can help, and members deserve better support to easily access these."
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