Fees paid by individuals transferring out of their defined benefit pension scheme have hit their highest levels since 2018, according to XPS, which warned savers could run out of money 10 years earlier as a result. XPS Pensions Group’s annual member outcomes survey, published this month, found members transferring in the year to 31 March 2021, faced average total fees of 1.9% each year, including new product charges and ongoing financial advice. This is a 10% increase from the 1.7% charged the previous year and is the highest level seen since XPS’s survey began four years ago. XPS said the increase came as transfer values rose significantly over the same period. It found the number of people transferring was 23% down on the previous year but the average transfer value paid increased by 29% to £375,000. The slowdown in transfer activity over the last 12 months is, perhaps, unsurprising since most of the year was spent in lockdown. Interestingly, it’s been those with the largest values who have continued to transfer. This, together with the reduction in choice for members transferring, may explain why average charges have increased by 10% since last year.

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