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DB transfer values up again in May but subject to volatility

8 June 2017

Variation in gilt yields led to a 1.7% or £4,000 rise in the average estimated defined benefit (DB) transfer value over the course of May, according to actuarial and consultancy firm Xafinity.

The actuarial and consultancy firm produces a monthly tracker (index) recording transfer values provided by an example DB scheme to a member aged 64, who would have a £10,000 annual pension at age 65, building in inflation.

In May the index had risen from £237,000 to £241,000 over the month.

The variation throughout the 31-day period was over 3.5%, leading to a variation of £9,000 between low and high points in the month. This variation was similar in April.

Xafinity director Sankar Mahalingham (pictured) said the general election and the start of Brexit negotiations would see this trend continue.

“In May 2017, we have seen a continuation in the volatility of transfer values experienced in April,” he said. “This month it has been caused mainly by variation in gilt yields.

“With negotiations for Britain to exit the EU about to start in earnest, we expect the volatility will continue for some time yet. Members continue to investigate this option while transfer values remain at high levels.”

The Xafinity Transfer Value Index can now be found monthly on the inside back page of Professional Paraplanner.

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