Pensions - Articles - DB pension transfer falls to lowest level for seven years

 XPS Pension Group’s Transfer Value Index fell by nearly 7% over May to £159,000, which is the lowest month-end value since XPS launched the Index in 2016. The continued fall in values is primarily due to a steady rise in gilt yields over May, coupled with a slight fall in long term inflation expectations. The level is the lowest month-end figure seen in seven years, and the lowest overall excluding the volatile fluctuations in valuation seen around the time of last year’s LDI crisis.

 Helen Cavanagh, Client Lead at XPS Pensions Group’s Member Engagement Hub said, “Whilst increasing interest rates reduce transfer values, they do present investment opportunities, which means a transfer could still be in a member’s interest. However, it’s really important that members seek unbiased, quality financial advice to ensure they make a decision that’s right for their circumstances.”

 XPS’s Transfer Activity Index increased dramatically during May, showing an annualised rate of 55 members per 100,000 transferring out of the current Scheme to an alternative arrangement. This is a sharp increase compared to April and breaks the trend of falling activity over the previous few months.

 93% of cases reviewed by The XPS Scam Protection Service in May raised at least one scam warning flag, according to XPS’s Scam Flag Index. This represents a slight fall compared to April; however it has now been a year since the Index last fell below 90%.