The number of cash equivalent transfer value (CETV) quotation requests and transfer payments have remained relatively stable throughout 2021, including a typical drop off in quotes over the New Year period, according to analysis by Barnett Waddingham.

The analysis showed that transfer activity remained "remarkably stable", despite the severe disruption seen in 2020 and early 2021 amid national lockdowns.

Barnett Waddingham associate, Mark Tinsley, said that this stability was “slightly surprising” given the ban on contingent charging from October 2020 and the reduction in the number of firms now prepared to give defined benefit (DB) transfer advice.

However, the analysis also suggested that these two factors could be offsetting each other for the time being, and the situation may change in future.

In addition to this, Tinsley noted that there was some volatility in transfer value amounts in Q4 2021, increasing by 4 per cent for a 60-year old amid "significant increases" in gilt yields.

Despite this increase, the size of a typical CETV for a 60 year old whose pension increases are linked to inflation is now around 3 per cent lower than it was a year ago, whilst CETVs for 60 year olds for whom pension increases are fixed in payment are around 7 per cent lower.

Tinsley also suggested that the volatility in market conditions may continue into 2022, with inflation currently at its highest level for a decade and the Bank of England increasing interest rates in response.

“Further unanticipated increases in interest rates could lead significant reductions in members’ transfer values, at a time when many members will be concerned with reports of a cost of living squeeze and could look to a pension transfer for some degree of financial relief," he explained.

“All of this means that it remains crucial for trustees and sponsors to review what support they provide to their members.”

In particular, he encouraged trustees to ensure that their administrators have implemented new procedures to assess whether they should refuse a transfer value that is at risk of being a scam and that they have in place sensible procedures to make the judgement calls necessary when a case is not a clear cut 'red flag'.

“A pro-active approach to directing members to reputable sources of transfer advice could help minimise the additional administrative burden the new requirements impose, as well as leading to better outcomes for members in general,” he added.

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