Transfer values recover from ‘sharp fall’ to close January unchanged

Pension transfer values closed January 2019 unchanged from December 2018 at £235,000, despite “fluctuating moderately” during the month, XPS Pensions Group has found.

XPS Pensions Group's Transfer Value Index revealed that the difference between the minimum and maximum readings was £6,800 (around 2.9 per cent).

Commenting on the findings, XPS head of DB growth, Sankar Mahalingham said: “Transfer values rose over the first half of January, suffered a sharp fall mid-month, before then increasing gradually towards the end of the month.

“The reason for the mid-month fall was due to lower inflation expectations, with reducing gilt yields towards the end of the month bringing the index back in line with the start of month position.

“While there was some volatility observed in January, it is lower than that experienced in December 2018. It is possible that there will be more volatility in coming months as various UK and global political events continue to unfold.”

In comparison to this time last year, pension transfer values have increased by £4,000 from £231,000, while the difference between the maximum and minimum readings in January 2018 was £6,000 (around 2.4 per cent).

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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