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Transfer values stay at historic highs into 2018

Typical transfer values for defined benefit scheme members remained high during 2017, ending the year at £236,000, according to Xafinity’s latest data.

This was little changed from the end of 2016 when the figure was £234,000 the Xafinity Transfer Value Index shows.

However there was some volatility over the year as the difference between the maximum and minimum readings of the index over 2017 was £17,000, or around 7 per cent.

Transfer values increased by 1.7 per cent during December last year, continuing the relative stability seen over the last quarter of 2017.

Xafinity Punter Southall head of DB growth Sankar Mahalingham says: “In 2017, transfer values have remained at or around historic highs, and we have continued to see significantly more transfer values being taken than in previous years. We have seen some volatility in transfer values, with changes in gilt yields being the main driver, a result of a number of issues such as the uncertainty caused by the general election, the first rise in the Bank of England official bank rate for over 10 years and commencement of Brexit negotiations.”

The index tracks the transfer value that would be provided by DB scheme to a member aged 64 who is currently entitled to a pension of £10,000 each year starting at age 65 and increasing each year in line with inflation.

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Comments

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  1. I think this is the real key driver as to why so many transfers have been advised compared to the past. Whilst pension freedoms undoubtedly have raised the demand for transfer advice I think the reason for the increase in the percentage of such advice to lead to transfers is the historical high values on offer.

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