The value of a typical defined benefit transfer hit the lowest month-end value seen in seven years, according to XPS Pensions Group.
The transfer value index fell by nearly 7 per cent over May to £159,000, which is the lowest figure since XPS launched the index in 2016.
XPS Pensions Group’s transfer activity index showed an annualised rate of 55 members per 100,000 transferring out of their DB pensions.
This is a sharp increase compared to April and breaks the trend of falling activity over the previous few months.
The value of a typical DB pension hit the lowest month-end value in May as rising gilt yields and falling inflation expectations hit values.
Helen Cavanagh, client lead at XPS Pensions Group’s member engagement hub, said: “While increasing interest rates reduce transfer values, they do present investment opportunities, which means a transfer could still be in a member’s interest.
“However, it’s really important that members seek unbiased, quality financial advice to ensure they make a decision that’s right for their circumstances.”
Additionally, the XPS scam protection service found that 93 per cent of transfers showed at least one warning sign indicative of a potential scam or poor member outcomes.
This represents a slight fall compared to April when it was 9 per cent; however it has now been a year since the index last fell below 90 per cent.
sonia.rach@ft.com
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