DB switch values slip as gilt yields dip

XPS’s Switch Worth Index fell 3.9% in January to £158,000, following two consecutive rises.

The lower was pushed by a fall in gilt yields through the month with long run inflation remaining flat.

The pension consultancy’s tandem Switch Exercise Index noticed a marginal enhance over January, to an annualised fee of 19 members in each 1,000 transferring their advantages to different preparations.

That is the fifth consecutive month the place switch exercise remained at a really low degree.

The variety of rip-off warning flags fell by 6% over the month with 84% of instances reviewed by the XPS Rip-off Safety Service in October elevating at the very least one rip-off warning flag. That is solely the third time the index has decreased to under 90% up to now 12 months.

XPS stated the autumn may very well be the results of an elevated variety of annuities being bought by members as a consequence of present market situations leading to beneficial pricing. Such transfers are decrease danger as no funding selections are made on buy of an annuity, so fewer rip-off warnings flags are raised.

The XPS Switch Watch displays how market developments have affected switch values for an instance member, in addition to what number of members are selecting to take a switch worth.

XPS Pensions Group’s Switch Worth Index reveals the estimated Money Switch Worth of a 64-year-old member with a pension of £10,000 a 12 months with typical inflation will increase. The worth modifications over time with market actions. Mortality assumptions are reviewed periodically.

XPS Pensions Group’s Switch Exercise Index characterize the annualised proportion of members that switch out of pension schemes administered by XPS. If replicated throughout all personal sector, funded, UK, DB schemes this means that roughly 20,000 DB members depart their schemes every year

XPS Pensions Group’s Rip-off Flag Index tracks the proportion of month-to-month transfers reviewed by the companies’ rip-off safety service which might be recognized as having warning ‘flags’ which point out that the member is susceptible to being scammed.


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