DB transfer values bounce back to near record levels - XPS

Defined benefit (DB) pension transfer values increased by 4 per cent in May to near record levels, data from XPS Pensions has revealed.

Its Transfer Value Index, launched in June 2019, found that total transfer values increased to £258,600 at the end of May, up from £249,300 at the end of April.

The increase, driven by a rise in long-term inflation expectations during the month, brought values to slightly below the index’s record high of £260,422, observed on 3 September 2019.

The number of members taking a transfer value also increased in May, up from a record low of 0.58 per cent of eligible members in April to 0.65 per cent.

This represents just over 6 in every 1,000 eligible members transferring each year.

DB transfer values fell for four consecutive months between September and December 2019, before the coronavirus crisis caused a volatile few months between January and April 2020.

“Transfer values rose during May as we saw long-term inflation expectations return to pre-lockdown levels,” said XPS partner, Mark Barlow.

“We also saw a small uptick in transfer activity during May which may be a result of those schemes who initially paused transfers restarting quotations.

“At XPS, around 25 per cent of schemes we work with paused transfers initially but our most recent survey in mid-May showed only 6 per cent continue to suspend quotations.”

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