The volume of defined benefit transfers could have started to edge back up during lockdown, according to consultants Lane Clark and Peacock.

In a weekly analysis, LCP looks at the number of requests to transfer out of 81 defined benefit schemes it administers.

The purpose of the exercise is to monitor how transfers have been affected by the Covid-19 crisis.

It includes all normal DB transfer quotation requests received, regardless of whether just a quotation is provided to the member, or whether the member ultimately decides to transfer out.

LCP says the number of member requests to transfer out of DB pension schemes had decreased substantially around the start of the imposition of the Covid-19 lockdown.

Only 120 new transfer quotation requests had been received since the lockdown announcement on 23 March, an average of 20 per week.

This is just 42 per cent of the average pre-lockdown level of activity in 2020 of 48 per week.

But last week the 81 DB schemes administered by LCP received 28 transfer requests – the highest since the start of the lockdown.

Commenting on the findings, LCP partner Bart Huby says: “This could be the beginning of a trend that sees transfers begin to head back towards levels we saw before the lockdown. But it is still very early days and trustees should keep an eye on their schemes as things could change quickly.”

New research from Barnett Waddingham shows most DB schemes have de-risked as part of their risk management strategies.

It analysed private sector DB schemes in the UK with assets of over £1bn, based on data up to 30 September 2019. This shows equity investment fell from 16 per cent to 13 per cent in a year across these big schemes, and equity allocation had halved over five years.

It also points out this year over 60 per cent of the UK’s largest schemes experienced a decrease in transfer value payments compared to just 5 per cent last year.

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