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DB transfer values stabilise in October

Pension-pot-700.jpgDefined benefit pension transfer values remained relatively flat in October, fluctuating between £229,000 and £234,000, according to Xafinity.

The difference between the maximum and minimum readings of the Xafinity Transfer Value Index from the end of September to the end of October was just £5,000, or around 2.3 per cent.

In September, average transfer values dropped by 4 per cent from £240,000 at the start of the month to £230,000 by the end of the month.

Xafinity DB growth head Sankar Mahalingham says: “At the beginning of November, the Bank of England raised the official bank rate for the first time since July 2007, but this was anticipated by markets and was already reflected in the fall in the index over September 2017, and there has been little change to the Index in early November.”

Mahalingham adds: “The markets are anticipating another rise towards the end of 2018; any delay in a rise would mean an increase to transfer values.”

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).

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