Defined benefit transfer values decreased by 3.7 per cent over June 2017 falling to £232,000 at the end of the month as measured by the Xafinity transfer value index.
This continues the period of volatility over the second quarter of 2017 with the difference between maximum and minimum readings of the Xafinity transfer value index over the second quarter of 2017 being £13,000 (or around 5.2 per cent).
Sankar Mahalingham, head of defined benefit growth of Xafinity, said: “In June 2017 we have seen a continuation of the volatility of transfer values that we saw in April and May, with changes in gilt yields being the main driver.
"The volatility we have seen over the second quarter of 2017 is a result of a number of issues such as the uncertainty caused by the general election and commencement of Brexit negotiations.
"These are unprecedented times, it remains to be seen whether we will enter a period of relative calm again over the summer months, or whether (as is perhaps more likely) this volatility will continue into the foreseeable future.”
The Xafinity transfer value index tracks the transfer value that would be provided by an example defined benefit 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 Xafinity transfer value index.
When asked whether transfer values had peaked, Patrick Connolly, certified financial planner at Chase de Vere, said: “That is a very difficult question to answer but they are still at historically high levels and likely to remain at high levels for some time to come.”
Figures from The Pensions Regulator found that up to 80,000 defined benefit pension transfers were made in the year ending 31 March while data from from Mercer, the professional services group, suggest £50bn has been taken out of company pension schemes over the last two years.
stephanie.hawthorne@ft.com
