Pensions - Articles - DB pension transfer values volatile over September


Defined benefit (DB) transfer values varied significantly during September 2019, whilst the number of members requesting a transfer value remains low, according to XPS Transfer Watch, which monitors how market developments have affected transfer values for an example member, as well as how many members are choosing to take a transfer value.

 XPS Pensions Group’s Transfer Value Index reached a record high of £260,400 on 3 September before dropping sharply to a low of £247,700 on 13 September. The index recovered to finish the month at £254,300; down slightly from £255,600 at the end of August. The movements were primarily driven by fluctuations in gilt yields over the month.
 
 XPS Pensions Group’s Transfer Activity Index recorded a further fall in the number of transfers completed in September, to an annual equivalent of 0.80% of eligible members, down from 0.86% in August. This is broadly in line with the rates seen in recent months, but significantly down on the rate of 1.30% observed this time last year.
 
 In market news, XPS Pensions Group have seen the average age of members taking transfer values from schemes they administer increase from age 52 to 57 over the past three years. This significant rise is likely to be a result of recent changes to guidance from the Financial Conduct Authority (FCA) which makes it more difficult for financial advisers to recommend a pension transfer to members below the UK minimum retirement age of 55.
 
 
 
 Mark Barlow, Partner, XPS Pensions Group commented: “September was a very turbulent month for the financial markets, mainly due to ongoing political uncertainty around Brexit. This has resulted in significant volatility in the Transfer Value Index, with a 5% swing being seen during the month. Despite the recent increases in transfer values being quoted, transfer activity remains close to the lowest levels that we have witnessed in recent years.
 
 “The increase in the average age of DB transferees reveals that transfers are most attractive to members approaching the point of retirement. It is important that trustees and sponsors consider this when setting transfer values, designing communications and helping members to find an appropriate financial adviser.”
 
  

Back to Index


Similar News to this Story

Just Group comment on the FCAs Sector Views report
Retirees are less likely to switch provider when taking out income drawdown or guaranteed income for life plans than they are for credit cards or cash
Speculation on Chancellor removing pension tax relief
Growing speculation that the chancellor may be planning to remove higher rate tax relief from pension contributions in his March budget. Aegon warns t
TPRs regulatory report on House of Fraser Pension Scheme
TPR regulatory intervention report issued in relation to the House of Fraser pension scheme. The high street retailer House of Fraser went into admini

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.