The ongoing coronavirus pandemic will encourage many people to reconsider their pension benefits and The Pensions Regulator’s (TPR) warning to stay put in defined benefit (DB) schemes is likely to be ignored by many, Premier says.
This follows the release of new guidance by TPR yesterday (29 April) urging members of the risks of transferring out of a DB scheme while the pandemic continues.
Premier director Ian Gutteridge said transfer values obtained by savers before coronavirus "may look attractive" to savers now and still trigger action.
"The pandemic has shone a light on the suitability of DB transfers in terms of meeting member objectives, and TPR's guidance to schemes is helpful in reinforcing the need for members to consider the risks and obtain suitable advice," he said.
"Whether giving greater consideration to the immediate and longer-term financial future of their partners and children, or simply a wish to have greater control over their finances, the coronavirus pandemic will be a trigger for some people to look differently at their future wellbeing."
Despite alternative ways of providing lump sums to families - particularly in the event of death - pensions are the natural solution for many, he added.
"For those who hold a valid transfer quotation from before the pandemic set in, this could seem at face value to be an even more tempting route given the uncertainty facing scheme funding.
"Transfer risk is an important consideration for those individuals looking to making these decisions, especially given they will be forfeiting the safety net of a sponsoring employer to top up any shortcomings."
Gutteridge concluded consultants would need to be more vigilant in communicating to members that there "is no turning back" once the transfer proceeds to better drive home TPR's intended message.
"Recommending further consideration and appropriate advice will prevent many, but schemes should still expect some members to continue."
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