Standard Life has called for the partial transfer option to be a mandatory part of DB transfer advice.

Rather than the "all or nothing" approach of either full transfer or no transfer, a partial transfer could be the best option in many instances, the company believes.

The firm said this should be made a requirement in the FCA's upcoming Defined Benefit regulations, to ensure consumers can have greater flexibility with their retirement income and would enable advisers to tailor advice to deliver a better outcome for clients.

Alastair Black, Head of Financial Planning Propositions at Standard Life, said: “The DB to DC conversation isn’t going away. So far it has been very black and white, but it doesn’t have to be ‘all or nothing’. For many the flexibility of freeing up their pot of DB money is very attractive, but the challenge is giving up the guarantees offered by a DB pension. However, with a partial DB to DC transfer they could have a mixture of both, retaining some guaranteed income with the scheme, while taking some risk to provide the greater flexibility they are looking for. This could be a really good solution for many retirees.”

Mr Black said: “The FCA consultation is an important exercise in reaffirming good practice which we absolutely welcome. We would like to see it go that bit further and use the opportunity to embed the value of partial transfers in the regulations, so that a partial transfer must always be considered as an option for consumers during the advice process.

“We recognise that some schemes offer this and others don’t and that’s down to the decision of scheme Trustees. Embedding the requirement in the DB regulations on advice for it always to be considered as an option, will ensure it is used appropriately where available.

“If partial DB to DC is more embedded in the advice process, we would expect to see more people deciding to opt for a mix of guaranteed and flexible income at retirement, rather than facing an all or nothing stalemate."


Paul Pettitt managing director of Origo, said: “Partial transfers, allowing members of occupational schemes to transfer part of their accrued DB entitlement into the DC world, could give pension holders the best of both worlds.

“It could enable sufficient entitlement to be retained in the scheme pension to provide a suitable income for life, while the rest of the pension could be moved to DC arrangement to take advantage of more flexible products and other benefits of the pensions freedoms – such as the new death benefits allowing pensions money to be passed down the generations.

“However, should partial transfers be sanctioned, it would provide the scope for considerably more transfer requests and processing volumes, adding further pressure on pension and third-party administrator systems, many of which operate manual processing of transfers, and where there are already processing issues and delays.”

He said: "This highlights the need for systems and processes to be automated, with agreed standards in place, enabling the greater volumes to be processed efficiently and cost effectively, and with an audit trail to provide measurable MI on service levels."