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Pension freedoms “lead to larger portfolios”

Many UK pension investors are to increase their portfolio sizes as a result of regulatory changes introduced last year, research indicates.

UK financial advisers said they had seen a surge in new business enquiries since the so-called ‘pension freedoms’, while nearly three-quarters of them expected an increase in portfolio size held by clients. These freedoms included the option to take the whole of your pension as a lump sum.

Of those predicting larger portfolios, a fifth estimated that the average portfolio would grow to more than £50,000 (€58,567) and a third expected average portfolios to reach more than £100,000. Seven per cent expected portfolios to grow in excess of £250,000.

The research, by Investec Wealth & Management, found 17% of advisers expected portfolio sizes to shrink.

A key source of new business resulting from the pension freedoms has been clients transferring from defined benefit to defined contribution transfers.

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