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September marks 12-months of ‘relatively stable’ pension transfer values

16 October 2018

Pension transfer values as measured by the XPS Pensions Group Transfer Value Index fluctuated during September 2018, with an overall fall during the month. The index was £232,000 at the end of August and £230,000 at the end of September.

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

Commenting on this month’s data, Sankar Mahalingham, head of DB Growth, XPS Pensions Group 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%) 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). 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 XPS Pensions Group Transfer Value Index.

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