Considerable interest is being shown in transferring UK pensions into overseas schemes, two advisory firms have told Financial Planning Today.

DeVere Group said the fact Theresa May is intending to trigger the UK’s exit from the European Union is helping to drive a ‘rush’ to transfer UK final salary pensions into overseas schemes.

The firm said enquiries have increased by 21 per cent since the beginning of December and it pinpointed Brexit as the main factor.

James McLeod, head of pensions at AES International, said: “Certainly there is considerable interest in transferring UK defined benefit pension schemes into QROPS, and many people are asking questions.”

Nigel Green, founder and CEO of deVere group, said: “Since the Brexit vote last June, there has been a groundswell of interest in overseas pension transfers. This has intensified in recent weeks as we begin the final countdown to the triggering of Article 50 by the end of March, when Britain will start negotiations with the EU over its exit.

“I expect the momentum to develop further, the closer we get to ‘trigger day’.”

He said three key factors were driving the trend.

Firstly, the reduction in gilt yields has driven up transfer values to record highs offering once-in-a-lifetime values.

Secondly, final salary pension deficits continue to come under pressure, and they are being exacerbated by the Brexit-induced falling of gilt yields, Mr Green said.

Thirdly, uncertainty over what a post-Brexit Britain will look like and how the economy will fare.

Mr Green said: “All in all, so-called ‘gold-plated’ final salary schemes are, in many cases, looking considerably less golden than they once did. As such, people are, quite sensibly, looking to safeguard and take control of their hard earned retirement income.”

Mr McLeod described such overseas transfers as a “very major financial step”.

He warned that there were “plenty of salesmen keen to take undisclosed commission from expats, impose high fees through redundant financial structures, and push non-mainstream investments”.

He said: “Pension scheme members need to look to the long term, and not to be jumped by immediate political uncertainties.

“For many, of course, it is advantageous in principle, for their particular circumstances. They may wish to be able to leave money to their wider family than just to their spouse or civil partner.

“But if it’s right in principle, then it’s really important that the transfer model does not wipe out the advantages, or (as often happens) make the transfer very damaging in practice.”