Transfer values increase over volatile December

Pension transfer values increased from £230,000 to £235,000 over a volatile December, XPS Pensions Group has revealed.

During December 2018, the XPS Pensions Group Transfer Value Index increased by 2.3 per cent in the most volatile month since September 2017.

Transfer values initially rose sharply in early December before gradually falling towards the end of the month.

Commenting on the findings, XPS Pensions Group head of DB growth, Sankar Mahalingham said: “These movements were primarily driven by changes in gilt yields, which dropped by almost 0.5 per cent, before recovering towards the end of the month.

“Inflation was also volatile, but less so, and ended slightly down over the month.”

This is a contrast to 2018 as a whole, where the index remained relatively stable throughout the year.

The figures have been relatively unchanged for the past few years, with transfer values at £236,000 at the end of 2017 and £234,000 at the end of 2016.

Mahalingham added: “Despite being relatively stable over the course of the year, transfer values suffered a volatile December.

“This volatility may continue through the first quarter of 2019 as economic uncertainty around Brexit persists.”

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).

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