Defined benefit transfer values remained stable throughout February, rising by just £1,000, according to the Xafinity Transfer Value Index.

At the end of February transfer values were £232,000 compared to £231,000 at the end of January. The difference between maximum and minimum readings of the Xafinity Transfer Value Index over February 2018 was £4,000, equivalent to 1.6 per cent.

Commenting Xafinity Punter Southall head of DB growth Sankar Mahalingham said: “Transfer values remained very stable during February 2018, continuing the trend we have seen since mid-September 2017. Both gilt yields and inflation have remained stable during the month.”

He noted that during February, the Bank of England Monetary Policy Committee (MPC) kept the Official Bank Rate at 0.5 per cent, but also indicated that rates may need to go up more quickly and further than previously thought during 2018.

“The impact of this on longer-dated gilt yields was muted, and it is these that affect transfer values rather than the Official Bank Rate. This suggests the comments from the Bank of England MPC were broadly in line with market expectations. While the market is anticipating gradual rises, any delay in actual rises would likely mean an increase in transfer values if the delay is expected to be prolonged,” he said.

The Xafinity 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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