The amount of funds transferred into self-invested personal pensions (SIPPs) has more than doubled in the two years since the pension freedoms were implemented, new data has shown.
While pre-April 2015 SIPPs were receiving 21% of transfer money from defined contribution schemes, that figure has doubled to 43% since, according to contract pension transfer service Origo Options Transfers.
Most funds (23%) were transferred from individual personal pensions (IPP), which themselves emerged as popular destinations for pension money, posting a four perecentage-point increase in transfers in. Income drawdown also saw a small increase, now standing at 8% of transfers, according to Origo.
The definite losers in the period, however, were annuity products, which pre-April 2015 were receiving 38% of monies transferred but over the past two years dropped by four fifths to a mere 7% marketshare.
With his 2015 reforms, former Chancellor George Osborne gave savers unfettered access to their pension funds from the age of 55, removing the need for many to buy an annuity.
While the percentage split between the sources of the transfers has not altered significantly in the two years since, the destination of the pension money has notably changed, Origo said.
The company compared defined contribution scheme transfers for the periods September 2008 to April 2015 and April 2015 to February 2017. It detected a 25% increase in transfer volumes through its service in the latter period.
Origo managing director Paul Pettitt (pictured) said: "Since the pensions freedoms were implemented in April 2015, there has been a clear trend to move into pension vehicles that can help pension holders make the most of the greater inheritance tax and drawdown flexibility offered under the new rules.
"As our infographic (below) shows, when it comes to pension vehicle popularity since April 2015 it's all been about SIPPs."
Origo's data did not capture transfers out of defined benefit schemes, which have also been on the rise since the reforms. Research showed in November almost one-in-three retirement savers would consider transferring their final salary pension benefits to defined contribution schemes in order to access the freedoms.
Origo is a not-for-profit fintech company owned by financial services groups that focuses on improving operating efficiencies in the industry to lower the cost for market participants.
Its Options Transfers service is used by about 90 brands - pension providers, administrators and platforms - making its data the most comprehensive in the market, the firm said.
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