23 Oct 2020
Defined contribution (DC) pension transfer volumes have “bounced back” from the initial effect of the coronavirus crisis, and are now on a “steady upward path” towards pre-lockdown levels.
This is according to findings from Origo Transfers Service data.
The figures revealed that although volumes declined in April and May due to the UK lockdown, they have experienced an uptick since June, and continued on an upward trajectory in the third quarter.
In addition, the results shows that although overall transfer volumes for DC pensions were gradually increasing last year, reaching a consistent high between Q3 2019 and Q1 2020 of approximately 20,000 each month, the present increase is rising at a “steeper rate” than last year, reports Pensions Age.
Origo managing director, Anthony Rafferty said of the findings: “The steady rise in transfer volumes is good news for the industry, reflecting that following the start of the crisis in March, when consumers and the industry were adapting to the initial imposition of lockdown, business is picking up again and volumes are fast heading for pre-crisis levels.”
In addition, from the end of the first quarter of this year up to now, overall average transfer times have increased by 1.2 calendar days, and average performance for the more straightforward cases has risen to 0.6 days.
Rafferty added that although there has been a fall in transfer volumes following the lockdown restrictions, which permitted organisations to uphold transfer times, additional transfer volumes in Q2 coincided with the rise in ceding times.
That said, he stressed that this still highlights the efficiency of the systems and operations under such tough circumstances, adding “it also reflects the benefits of automation and digitisation of processes within financial services. Imagine the impact of the coronavirus crisis on a paper-based system.
“I believe the crisis will act as a catalyst for the greater adoption of automation and electronic services, driven by a potent combination of operational efficiency, cost, business continuity and consumer demand.”