Transfer values remain stable throughout July

Defined benefit (DB) transfer values stayed relatively stable throughout July after several months of volatility, according to the latest Xafinity transfer value index (TVI).

The value of Xafinity’s hypothetical pension fell by less than 1% from £232,000 at the beginning of the month to £230,000 at the end.

The greatest difference between the maximum and minimum readings of the TVI during July was just £6,000, or about 2.5%.

The relative calm follows a period of volatility during the second quarter of 2017. The month of June saw the difference between minimum and maximum Xafinity readings swinging by more than double July’s reading, about 5.2% (or £13,000).

April and May also witnessed increased volatility. May saw the index pointing to a variation of 3.5% (or 9,000) and the snap-election rocked transfer values in April.

Xafinity’s index tracks the transfer value that would be provided by an example DB scheme to a member aged 64 who is entitled to a pension of £10,000 each year, starting at age 65. It increases each year in line with inflation.

Head of DB growth Sankar Mahalingham said: “Transfer values stayed fairly stable during July 2017, compared to the volatility in transfer values that we saw over Q2 of 2017. It remains to be seen whether this period of relative calm will continue over the remainder of the summer.”