Pension transfer values fall 2.3% in November

Hannah Godfrey reports...

Pension transfer values fluctuated during November 2018, with an overall fall of 2.3%, according to XPS Pensions’ transfer value index.

The benchmark index, which stood at £235,000 at the end of October, had fallen to £230,000 by the end of November. The difference between minimum and maximum readings of the index during the month was £5,400 – again, around 2.3%.

The fall followed a rise in October, when the index edged up 2.1% over the month.

XPS Pensions Group head of DB growth Sankar Mahalingham attributed the decrease in transfer values over November primarily to a rise in gilt yields of around a quarter of one percent.

“This was partially offset by a small increase in inflation over the month,” he added. “Volatility during November was a little lower than in October despite heightened uncertainty around the process for Britain leaving the European Union.”

XPS’s index tracks the transfer value that would be provided by a hypothetical defined benefit 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.