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XPS Transfer Watch reveals largest ever monthly fall in transfer values

XPS Transfer Watch reveals largest ever monthly fall in transfer values

12 Mar 2021

XPS Transfer Watch in February revealed almost a 5% drop in transfer values from the previous month, the biggest monthly fall in since XPS started tracking values in 2014. This is due to a rise in government bond yields throughout the month, which has increased discount rates used to place a value on members’ benefits.

Transfer values are now returning to levels last seen in March 2020, before the first lockdown. Transfer Activity and Red Flag indices remain steady with XPS’s scam protection service detecting one or more red flag in 58% of transfers processed in February.

XPS Pension Group’s Transfer Watch monitors how market developments have affected transfer values for a typical pension scheme member. It also provides analysis on how many members are choosing to take a transfer from their DB pension scheme and, through its Red Flag Index, the incidence of scam red flags identified at the point of transfer.

Mark Barlow, Partner, XPS Pensions Group added:

“Transfer values plunged during February, returning to levels not seen since the start of lockdown. This means members will need to bear in mind the impact on any alternate pension their transfer value can now provide. Despite this we have not seen a fall in transfer activity over the month.”

Helen Cavanagh, Consultant, XPS Pensions Group commented:

“The fall in our XPS Red Flag Index for two consecutive months is very welcome, and we hope to see this trend continue. Protecting members from scams is an area of focus for the industry, which is highlighted by the Pensions Act 2021 imposing conditions on a member’s transfer rights. Ahead of the publication of the regulations, due later this year, trustees should be doing what they can to protect their members from pension scams, including signing up to the Pension Regulators scam protection pledge.”

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