The coronavirus crisis has put the brakes on pension transfer activity, as the number of members taking a transfer value fell to a record low in April, according to data from XPS Pensions Group.
XPS’s transfer activity index recorded an annual equivalent of 0.58% of eligible members completing transfers in April, down from 0.76% in March – the previous record low.
The number of members transferred represented just less than six in every 1,000 eligible members. Additionally, requests for transfer value quotations were found to have fallen by just over a third compared to last April.
Elsewhere, and after a turbulent March, defined benefit (DB) transfer values experienced a more stable April, increasing by around 3% over the month from £242,600 at the end of March to £249,300 at the end of April, according to the group’s transfer value index.
XPS’s index tracks the transfer value that would be provided by a hypothetical 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.
XPS pensions group partner Mark Barlow said: “The ongoing Covid-19 crisis has predictably caused a dip in transfer activity. The record fall will be a result of some schemes putting a temporary halt on transfers, as well as members (and their financial advisers) being less inclined to transfer in such uncertain times.
“We may see a rebound in activity as we emerge from lockdown, although the observed decline in requests in April suggests that any upturn will be some months away, due to the lag between transfer requests and completions.”