The total value of pension transfers rose slightly from £8.2bn in the second quarter of the year to £8.6bn in the third quarter, the latest figures from the Office for National Statistics show.
This is down from a high of £10.6bn in the first quarter, however, with experts predicting long-term decline as advisers exit the market.
The watchdog has also tightened rules around advising on transfers and will require pension transfer specialists to have the same qualifications as an investment adviser from October 2020.
Advisers must now provide a suitability report regardless of the outcome and should explore clients’ attitudes to the general risks associated with a transfer, not just investment risks.
AJ Bell senior analyst Tom Selby says those who transferred in the hope of making a quick buck on the markets will have faced a rude awakening this year as stocks have tumbled in value.
He adds: “Over the longer term we expect the volume of transfers to decline, partly as a result of advisers exiting the market as the FCA tightens its focus on the market. Rising insurance costs will also likely push many advisers away from business that is deemed risky by PI firms.
“Despite that, the decline of DB is likely to be a story that runs through into 2019, particularly as once mighty high street giants struggle desperately to make ends meet.”