Grove Pension Solutions

IFA Newsletter April 2025

Apr 8, 2025 | Pension News

Defined Benefit Pension Transfer FAQ’s & Fees

Process Update – Moneyhelper Scam Call

Many pension schemes now require members to complete a MoneyHelper ‘scams’ call before they will release a transfer payment. During this call, clients must answer a series of questions correctly – one of which is who provided them with pension transfer advice.

Unfortunately, we have encountered instances where clients incorrectly stated that their referring IFA – rather than Grove – provided the pension transfer advice. This has resulted in the automatic cancellation of the transfer and significant delays, sometimes lasting several months.

To help avoid these issues, it’s important that clients clearly understand your role in the process. While you may have introduced them to us, your involvement typically ends once the initial referral has been made.

For further details, please refer to our FAQs – DB Pension Transfer Service for IFAs

Transfer Timescales Unchanged

According to data published by XPS and reported by FTAdviser (DB transfer activity falls to record low – FTAdviser), Defined Benefit transfer activity has fallen to an all-time low. Given this significant drop in volume, one might reasonably expect a corresponding reduction in transfer timescales.

However, our own research indicates otherwise. On average, transfers still take between 6 to 8 months from the initial enquiry to completion. In fact, nearly three-quarters (72%) of cases fall within this timeframe, suggesting that lower volumes have unfortunately not translated into faster processing times.

Interest Rates

Despite earlier signals that an interest rate cut might be imminent in 2025, the Bank of England held the base rate steady at 4.5% in March, citing persistently above-target inflation. Global economic uncertainty—fueled in part by the trade or tariff war linked to President Trump—continues to weigh heavily on central banks worldwide. Since the base rate peaked at 5.25% in August 2023, we’ve seen three modest reductions of 0.25% each. In response, defined benefit (DB) transfer values have largely stabilised over this period.

Ftadviser.Com Article

We have recently published an article on FTAdviser.com, and a copy of this is available here The impact of ill health and vulnerability on Defined Benefit transfer advice | Grove Pension Solutions.

The Grove Pension Solutions ‘Real World’ CETV Index

The Grove Pensions Solutions (GPS) CETV Index provides an average CETV based on a £10,000 per year pension. This is calculated by analysing the actual CETV and benefit value of thousands of ‘real-world’ CETV’s calculated since January 2024. This is unlike other indexes that use a ‘typical’ CETV based on assumptions.

The Grove Pension Solutions CETV ‘Generosity’ Index

A Transfer Value Comparator (TVC) is the amount a transfer value would need to be at the date of calculation, to match the future benefits from the existing scheme, based on risk free investments. Comparing the TVC against the CETV gives an indication of the relative generosity of the CETV. For example, if the Transfer Value offered by the scheme matches the TVC (100%), this indicates a generous transfer value.

The following chart is based on analysis of thousands of real CETV’s calculated since January 2024.