Pension transfer values remained high during 2017, fluctuating throughout the year but ending at £236,000 – little changed from the 2016 end of year figure, £234,000, according to the Xafinity Transfer Value Index (TVI).
The difference between maximum and minimum readings throughout 2017 was £17,000, or about 7%.
In the final month of the year, the TVI increased by 1.7%, continuing the relative stability seen during the last quarter of 2017.
Xafinity Punter Southall head of DB growth Sankar Mahalingham (pictured) said: “In 2017, transfer values have remained at or around historic highs, and we have continued to see significantly more transfer values being taken than in previous years.
“We have seen some volatility in transfer values, with changes in gilt yields being the main driver, a result of a number of issues such as the uncertainty caused by the General Election, the first rise in the Bank of England Official Bank Rate for over 10 years and commencement of Brexit negotiations.”
A year of volatility
Xafinity’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.
The year began with a flat January. In February, transfer values began to rise, when they reached £237,000 – just £6,700 shy of their all-time high of £244,000 in October 2016. However, in March values fell back by about 1%, to £235,000.
April and May saw increased volatility. In April the snap-election rocked transfer values, and in May the index pointing to a variation of 3.5% (or £9,000).
Volatility continued throughout the summer. The month of June saw the difference between minimum and maximum Xafinity readings swing by more than double July’s reading of about 5.2% (or £13,000). August meanwhile saw the index rise by 3% from £230,000 at the beginning of month to £237,000 by the end of it. The index then it fell 4% throughout September from £240,000 in the first week to £230,000 by the end of the month.
The final quarter brought calm to the index, finishing the year at the much same value as the end of 2016.
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