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Pension transfer values remain stable during February

7 March 2018

Pension transfer values as measured by the Xafinity Transfer Value Index remained stable during February 2018.

The index was £231,000 at the end of January and £232,000 at the end of February but was down from 236,000 at the end of December 2017and had been close to 245,000 in April  2017.

The difference between maximum and minimum readings of the Xafinity Transfer Value Index over February 2018 was £4,000 (or around 1.6%).

Sankar Mahalingham, head of DB Growth, Xafinity Punter Southall 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.

“During February, the Bank of England Monetary Policy Committee (MPC) kept the Official Bank Rate at 0.5%, 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.”

 

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). Different schemes calculate transfer values in different ways. A given individual may therefore receive a transfer value from their scheme that is significantly different from that quoted by the Xafinity Transfer Value Index.

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