Scary news day!

steve webb

old photo – Steve Webb

Scary news day!

Yesterday (Weds 24th) saw the arrival of Boris Blimp in his West End townhouse and the announcement that nothing much has changed at the top of the DWP- except the SOS’ brief – which now includes equality for women.

We have yet to hear whether the Gove-loving Guy Opperman will survive the cut but Amber’s news suggests that work and pensions are not top of the PM’s priorities so maybe he’ll be spared.


The shock of old fake news.


Who’s got the unicorn now?

Weds 24th July 2019 also saw the publication of tPR’s estimates of pension transfers from DB schemes, via an FOI from former pension minister Sir Steve Webb.

Here’s Royal London’s deeply embargoed press release

Royal London asked the Pensions Regulator to update previous estimates of the volume of DB transfers and the latest figure suggests that 210,000 transfers worth £34 billion were reported to TPR in 2018/19.

The following table shows estimates for each of the last three years based on FOI replies:

Reporting year Number of transfers Value of transfers
2016/17 80,000 £12 bn (est)
2017/18 100,000 £14 bn
2018/19 210,000 £34 bn
Total 390,000 £60 bn


Sources: 2017/18 and 2018/19 figures confirmed in new FOI supplied to Royal London.  2016/17 volume figure from FOI on TPR website.  Value figure for 2016/17 estimated on basis of average transfer value of approx. £150k across 2017/18 and 2018/19 data.

Commenting, Steve Webb, Director of Policy at Royal London said: 

“These figures show the continuing huge interest in using pension freedoms to access pension rights in a more flexible way.  Although the volume of transfers has probably passed its peak, large numbers of people are still interested in seeing whether reshaping their pension benefits would be in their interests.  It remains the case that staying in a DB scheme will be the right answer for most people, but there may be individual reasons why a different combination of pensions would give a better outcome.  In such cases it is vital that there continues to be a supply of impartial and expert financial advice for those considering making such a big decision”.

If I was as rushed to get stories out as our pensions trade press, I’d have done what they did and print tPR’s version of the truth as gospel (fully endorsed by the FOI).

However, there is a  flaw in tPR’s methodology. They collect numbers annually in arrears – making all the numbers a year late.

If you want to know what really happened, you need to consult the ONS table 4.3 which gives you the cashflows out of DB schemes to other schemes in real time.

You’ll see from this cut of data, that the numbers quoted by tPR for 2018-19 actually happened in 2017-18;This image has an empty alt attribute; its file name is Screenshot-2019-07-25-at-07.41.02.png


The numbers are shocking – but it’s the shock of the old (4.3) that should be the news – not that it’s new news (the ONS numbers are published quarterly in arrears which is as close to real time as you can get).

The last ever cut of numbers for the MQ5 4.3 table was in March this year and this shows the numbers being continued through to the end of Q4 2018. We hope to get new and improved numbers in due course

Transfers for the four quarters of 2018 look like this

Screenshot 2019-07-25 at 06.49.34

What is new is the sharp drop off in the run rate of transfers from Q1 (£10.5m) to Q5 (£6.3bn). If this drop off is being continued in 2019 then far from supporting Steve Webb’s assertion about interest in pension freedoms, pension transfer levels may be returning to historical norms (reverting to mean as I’m supposed to say).

These numbers do not appear in TPR’s report but will no doubt be reported as 2019/20.

As Fred Norris, who compiles the ONS statistics , laconically puts it in his commentary

Transfers to other pension schemes in 2017 (£37 billion) and 2018 (£33 billion) were at the highest levels since the start of this series in 1984. This follows a generally higher level of transfers to other schemes in recent years and may be due in part to pension reforms introduced in 2015.

Note the use of the phrase “may be due in part”. The pension freedoms may have something to do with it , but I suspect that the bulk of the 2017 and 2018 bulge was down to the super-effective efforts of IFAs.

From the IFAs I have spoken to recently, transfer activity is being stifled by restrictions from PI insurers who are effectively giving IFAs “quotas”. That- combined with the departure and withdrawal of some of the most active IFAs in this market, makes the supply side a lot smaller. I suspect there may be some drop off in demand too – perhaps because of the monstrous bulge in transfer activity in 2017-2018 (and Q1 2019).

I maintain  that the transfer volumes are driven not so much by demand for pension freedoms but by the capacity and desire of IFAs to promote and fulfil pension transfers.

The problem with historical reporting

TPR is not alone in reporting DB transfer numbers in the wrong year and in incomplete amounts.

The FCA still stick by their figure for 2017-18 of £20bn transfers, a number compiled from IFA returns and well below the ONS numbers.  The ONS numbers do – it is true – include some Occ DC transfers out, but these are small beer, the real news is that both TPR and FCA have been under-reporting the scale of DB transfers.

The people who know the scale of the transfers are the recipients of the money . 2017 and 2018 have been golden years for single premium pension payments into DC accounts with the big players like – Prudential, Royal London, Old Mutual, Zurich and the platforms with their various SIPP partners.

I could have written an alternative commentary to Steve Webb’s which could have thanked IFAs for the new business and thanked tPR and FCA for under-reporting the scale of activity until the money was fully on the fund platforms of the DC providers.

The problem with historical reporting is that it allows the insurers to shut the stable door after the horse has bolted. The horse is now standing in the paddocks of the insurers and SIPP providers.

Scary news day – the shock of the old

I don’t know if the Royal London PR team deliberately timed the announcement of old and to a degree – fake news to coincide with the arrival of Boris Blimp in his Westminster Town House, but it appears to have scooped the news pool.

I hope that one or two of the less time -constrained journalists in the national papers, will look at these numbers for what they are – which is a reflection of how behind the times TPR is, in understanding the data.

ONS was the source for this data and we await a new source now that MQ5 has packed it in. For the moment we are left reading MQ5’s obituary

As initially announced in September 2018, this is the final MQ5 statistical bulletin in its current form.

Over the next two years, changes to Office for National Statistics (ONS) surveys that cover the financial sector will be necessary as part of the Enhanced Financial Accounts (EFA) initiative whereby the ONS, in partnership with the Bank of England, plans to improve the quality, coverage and granularity of UK financial statistics. This will be achieved by using new data from commercial, regulatory and administrative sources and reducing the burden and compliance on businesses that return our surveys.

This work entails wide-ranging redesign (and in some instances replacement) of the existing surveys that currently provide the data presented in this publication, making continued production of the MQ5 in its current form unviable. Therefore, the MQ5 will now cease and the ONS apologises for any inconvenience this may cause to users of this publication. However, this work should ensure that improved statistics relating to the investment activities of the UK financial sector, can be produced within the next two to three years.

The scariest news today is that we are currently in the dark about what is happening in 2019. Goodness only knows what is going on in and outside the stables.


Where’s the unicorn heading?


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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3 Responses to Scary news day!

  1. Julie Richards says:

    There is truth in both what you/tPR/FCA and what the Steve Webb’s of this world are saying. Perhaps you should all talk more to some of us who have gone through big exercises to see what actually happens. Problem is the complex reality doesn’t make for good headlines. Also, are we neglecting a key aspect – the way low gilts yields have made it almost too good an opportunity to miss to take advantage of a form of arbitrage against schemes (and, from selfish point of view, why not). Or wouldn’t that make for as exciting a strap line or align with vested interests? There seems to be a real actuarial/funding issue/mismatch here – lets have a look at that as part of this debate on transfers and value for money. Its too important just to polarise views – or imply it rests so much on the morals IFAs

  2. henry tapper says:

    Thanks Julie – points well made – and heard – and absorbing!

  3. Mrs Irene Bromsgrove says:

    I would like pension sent to me by check

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