April proved a volatile month for defined benefit (DB) pension transfers, with values increasing just 1% over the course of the month, the latest Xafinity Transfer Value Index has found.
According to the Xafinity, transfer values had peaked at their previous record high of 244,000 during the month, but had fallen to £237,000 by the end of April.
This meant there was a 3.5% variation during the month, equal to a value of £9,000.
The index tracks the transfer value that would be provided by an example 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.
Xafinity director Sankar Mahalingham said: "Transfer values in April 2017 were more volatile than in recent months, with changes in inflation expectations being the main driver. This is partly due to the triggering of Article 50 and the announcement of the General Election; more fluctuation is likely over the coming months."
He added: "Transfer values remain high, and the trend for more members taking this option will no doubt continue."
Period of calm
April followed a period of relative calm for transfer values throughout the first quarter of the year.
Values had stayed flat in January but began to rise again in February, 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.
However, despite transfer values remaining fairly stable, Xafinity observed an increase in the number of DB transfers made over the course of the first quarter.
The number of transfers completed at schemes Xafinity works with, as well as the number of transfer requests received increased 70% over the three month period - a year on year increase of 166%.
Meanwhile, an adviser told Professional Adviser last week he feared attractive DB transfer fees resulting from handsome transfer values could lead to misselling.
The chairman isn’t answering his email
Reforms not enough
An economic cocktail
To encourage consumers to shop around
Will report to Pat Shea