Defined Benefit 

Latest pension transfer values revealed

Latest pension transfer values revealed

Defined benefit pension transfer values finished February unchanged at £235,000, despise rising broadly throughout the month.

This is according to the XPS Pensions Group transfer value index, which remained in line with January values, despite the difference between maximum and minimum readings of the index in the month was £5,100, or 2.1 per cent.

The 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 index, the consultancy firm stated.

According to Sankar Mahalingham, head of DB growth at XPS Pensions Group, the transfer value index increased to nearly £240,000 during February before suffering a sharp fall back to £235,000 in the last few days of the month.

He said: "A combination of increased inflation expectations and reduced gilt yields were the reason for the rise in the index initially in February, with increased gilt yields at the end of the month bringing the index back in line with the start of month position.

"The volatility observed in February was similar to January, but lower than that experienced at the end of 2018. 

"During March 2019, there may be more volatility in market conditions as the negotiations regarding Britain's exit from the EU continue with the March 29 deadline approaching."

Paul Gibson, managing director at Granite Financial Planning, said: “All known information is already priced in. Transfer values do change from time to time due to a multitude of factors. 

“Brexit is just a mess and people are in the main sick of hearing about it.”

maria.espadinha@ft.com

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