The volume of transfers out of final salary pensions in the UK increased by more than 50% in the last year, according to research by Royal London released today.
It shows that the typical cash sum offered is in the £250,000 to £500,000 range, and between 25 to 30 times the value of the annual pension given up, although many are worth 30 to 40 times as much.
The vast majority transferring out of pensions were found to be in their fifties, with "the ability to provide more flexible income in retirement" the most common reason given for doing so.
"It is clear that large and growing numbers of people are choosing to exchange the promise of a regular pension in retirement for a large cash lump sum," Royal London director of policy, Steve Webb, said.
"This makes it all the more important that people think very carefully before making a transfer, and take full account of independent financial advice before making such an irrevocable decision."
As well as increased flexibility, the other main reasons given for transfers are large current transfer values, inheritance considerations, access to greater tax-free cash, and taking benefits earlier than allowed in schemes.
However, advisers often warn that transfers represent poor value, that savers risk losing the certain income from defined benefit (DB) schemes, and that the associated investment risk may not be appropriate.
In addition, advisers say they are frustrated by the length of time it can take to obtain information from schemes in order to provide advice on transfers.
Around 60% say they "sometimes or often" have to get a new transfer value quote because the three-month window of validity lapses before the advice process is completed, and almost 90% want standardised information to be supplied by schemes.
"There is no doubt that the ability to transfer a DB pension into a more flexible format is very attractive, provided that the decision to transfer is based on good quality independent advice," Webb continued.
"But sometimes the process takes far too long, through no fault of the adviser. We need a system where pension schemes provide on day one all of the information needed to decide if a transfer is a good idea or not.
"This would make life a lot easier for schemes, advisers and, most importantly of all, consumers."