Final salary scheme transfer values jump due to COVID-19

The biggest determinate of transfer values is UK bond yields.  The lower these go the higher the transfer value of pensions go.  With COVID-19 spooking the markets investors have piled into bonds. This investment has driven bond yields down to a point where they are lower than at the height of Brexit uncertainty.  

The falling bond yields will cause a surge in pension transfer values, taking them above the highs seen in 2019. The easiest way to think about the relationship is that final salary pension values move like house prices, the lower interest rates go the higher the values become. This happens for pensions because when someone retires the pension scheme has to have safe assets that will provide an income for life. If the interest rates (yields) that they get from those assets falls then they need more assets to provide the income for life. A transfer value works out the level of assets that would be needed to provide you your guaranteed income.



Workplace pensions likely to drop deeper into the red

The PwC SkyVal pension index at the end of January saw the combined deficit of defined benefit pension funds climb a whopping £40 billion from £170 billion in December to £210 billion in January.  The UK’s 5,450 DB schemes reported assets of £1,790 billion, compared with pension liabilities of £2,000 billion. 

Since then the coronavirus has decimated share markets leading to likely falls in UK pension asset values, while at the same time inflating liabilities (transfer values) for these schemes.  This will be placing increasing pressure on UK schemes to top up their funds from earnigs so they can meet their obligations to members.


UK schemes can now halt transfers

The Pensions Regulator (TPR) has publicly stated that over the next three months UK defined benefit schemes may suspend issuing transfer values and paying transfers out. Not issuing a transfer value or paying it is a breach of the Trustees duties and they must report the breach. However, the TPR has stated that they will not take any action against a scheme that breaches (read more). However, it is still at the individual schemes discretion as to what they do.

There have been calls for pension transfers to be halted in the UK for six months (read more). This is because of the unprecedented situation in the markets UK schemes could not be sure of the underlying value of their pension funds. With uncertain scheme funding positions there is a fear that some people may end up getting a better deal than others if they elect to transfer out of their pensions.

To be clear just because there are troubles in the UK does not mean that you should simply transfer your pension.  That would be blind decision making.  There are reasons to leave a UK pension in the UK and reasons for transferring it – there is no universal right or wrong answer.  No two people or circumstance are the same, so you need to be sure you’ve made the right decision for your UK pension based on your personal circumstances. 



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straightforward and painless

Until now I'd imagined my UK pension funds being locked away behind all manner of firewalls and bureaucratic hurdles to access on retirement. Before committing the one surviving official document of my English OE to the bin - a single page detailing my private pension details - I contacted you out of curiosity. The result feels a little like winning lotto.

Peter W

very stress free

Thank you Cambel for your help and guidance throughout this process in getting my pension transferred (very stress free for me). It is greatly appreciated and I would certainly recommend you and Charter Square to others who are interested in transferring their pension.

David R, New Zealand

You guys rock!

I just wanted to say a great big thank you to you and your team. You are all totally awesome. I received a cheque yesterday from the Prudential to apologise for the ‘recent inconvenience’ that I had experienced. Thank you for doing this for me. You guys rock!

Noelle B, New Zealand

professional, insightful

Charter Square were professional, insightful and a pleasure to work with. They rose to the challenge of consolidating my overseas pensions and bringing them home with minimum fuss for me and maximum effort on their part.

Jens H, New Zealand

thorough, professional and prompt

Very thorough, professional and prompt service from the team at Charter Square. Thanks for making the bewildering world of pension transfers super simple.

Jules T, New Zealand

Best party to deal with

Thank you kindly for keeping in touch with me. For now, I will not be moving my pension. I will however be keeping your details and referring back to you when I wish to pursue. You by far are the best party to deal with, no nonsense, professional and in my opinion genuine. I do sincerely thank you for your advice to date.

GE, New Zealand


Securing the freedom to use savings that are actually ours to work with has been stressful in the extreme. While I never planned on giving up there were many times when the current (UK) holder made the whole process seem well beyond my determination and ability. It’s easy to look at the 36 month history of this claim with the benefit of hindsight, but the conclusion is that employing Charter Square in the first instance would have been wise had I been able to anticipate the red-tape that appears to have been deliberately created to stall access.

CP, Auckland