Pension investments soar in 2016

New pension investments rose by 24 per cent to £17.4bn in 2016, excluding transfers, up from £14bn in 2015, according to figures from intermediary database provider Equifax Touchstone.

Pension savings-2015Single premium flexible drawdown inflows jumped 87 per cent in the year to £1.6bn, a value increase of £0.7bn on 2015.

New inflows for the final quarter of the year were up 10.6 per cent on Q3 to £4.6bn.

The data, which covers more than 90 per cent of the UK’s life and pensions companies, shows that including transfers, total pension investments for the year reached £33.7bn, up by 18.6 per cent on the £28.4bn invested in 2015.

Transfers across all pension products were up by 18.7 per cent to £16.1bn, which Equifax Touchstone said reflects a continued demand for investors to adjust their retirement arrangements and access the appropriate product wrapper for their needs.

Sipp inflows increased in 2016 by 16.2 per cent to £18.8bn, up from £14.4bn in 2015.

Equifax Touchstone director John Driscoll says: “It’s promising to see 2016 end on a high after weak Q3 figures when inflows fell on market uncertainty from events including Brexit. Strong stock market performance towards the end of the year prompted a recovery in investor sentiment, a trend which has continued into the New Year, indicating continued growth in pension investments in the months ahead.

“For 2017, transfers will be an interesting area to watch; growing concerns around financing retirement will continue to drive people towards final salary transfers. Investor jitters around the security of final salary schemes following high-profile issues will also contribute to a continued rise in transfer volumes as more ‘insistent’ clients consider final salary transfers to access their savings.”