Pension transfer values fell by nearly 7% in May, according to XPS Pension Group.
The firm’s Transfer Value Index saw values end May at £159,000 ($202,000, €185,000), the lowest month-end value since the index’s records began, in 2016.
The decrease was primarily led by “a steady rise in gilt yields over May, coupled with a slight fall in long-term inflation expectations.”
As well as the lowest month-end level in seven years, XPS reported that this was also the lowest level seen overall, excluding the “volatile fluctuations in valuation seen around the time of last year’s LDI crisis.”
XPS’s Transfer Activity Index increased during the month, showing an annualised rate of 55 members per 100,000 transferring out of the current scheme to an alternative arrangement. The firm said that this was a sharp increase compared to April and that it breaks the trend of falling activity over the previous few months.
Some 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 shows a slight fall compared to April, but it has now been a year since the Index last fell below 90%.
Helen Cavanagh, client lead at XPS Pensions Group’s Member Engagement Hub, said: “While 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 important that members seek unbiased, quality financial advice to ensure they make a decision that’s right for their circumstances.”