DB pension transfer values fall over September

Defined benefit pension transfer values fluctuated over September, falling slightly by the end of month to £230,000.

According to the XPS Pensions Group Transfer Value Index, the value at the end of August was £232,000, meaning the value fell by £2,000 over the month.

The difference between maximum and minimum readings of the Index over September 2018 was £6,200 (or around 1.7 per cent). At one point during September the index dropped to £227,000, the lowest value in over 12 months.

Commenting, XPS Pensions Group head of DB growth, Sankar Mahalingham, said: “We have now seen a 12 month period of relatively stable transfer values. The index at the end of September 2018 stands at the same value as it did at the end of September 2017, £230,000, and has fluctuated by only £9,900 (or around 3 per cent) during that time.

“As we approach the deadline for agreeing a deal for Britain leaving the European Union, speculation about the type of deal negotiated, or indeed the possibility of a no deal scenario may impact gilt yield and inflation expectations, thereby increasing the volatility in the index.”

The XPS Pensions Group Transfer Value Index tracks the transfer value that would be provided by an example DB scheme to a member aged 64 who is currently entitled to a pension of £10,000 each year starting at age 65 (increasing each year in line with inflation).

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