What can you do about it?

The most obvious point is that clients need help understanding the process of transferring a DB scheme and the timescales involved, to ensure that their plans and expectations are set accordingly. 

Many clients will obtain a ‘live’ transfer value with a three-month guarantee date and naturally assume that it is a simple ‘take it or leave it’ decision. 

As such, their perception will be that this is a lengthy window to seek and obtain advice, and even that the advice process itself will reflect the simplicity of the situation. However, as we have seen above, this is not the case. 

Almost every member of a DB scheme of significant value should consider a transfer at least once prior to taking their scheme benefits. 

For most, the advantage of a ‘guaranteed’ scheme pension and the certainty that this brings to their retirement will outweigh the traditional reasons for transferring – flexibility, control and death benefits. 

However, there will always be a proportion whose personal circumstances make a transfer an attractive prospect, and need to take advice accordingly. 

But given that this is an irreversible decision that will impact the rest of a client’s life, the advice process must be detailed and robust and clients should be allowed time at all stages in the process to consider their options carefully.

In short, advisers should help clients manage their expectations, plan ahead and where possible ensure that you have plenty of time left on the guarantee date to avoid lengthier delays later. 

Where a guarantee date is missed and a new transfer value needs to be recalculated, this typically adds another two months to the overall timescales.

As well as this lengthy added delay, most schemes now apply a fee for a recalculation of around £300 to £400, although the highest such fee we have seen recently was an astonishing £2,400.

Tim Flippance is managing director of Grove Pension Solutions