The speed at which pension savers had been transferring out of their outlined profit pensions hit a brand new file low in April 2024, with solely 14 members in each 1,000 transferring.
April’s XPS Switch Exercise Index figures proceed the pattern of decline in switch exercise and was the fourth time the Index has fallen to a brand new file low over the previous 12 months.
Switch values fell by 3.4% throughout April to £155,000, their lowest degree since October 2023.
XPS stated the principle driver of the autumn was an increase in gilt yields, which was offset barely by a marginal enhance in long run inflation expectations.
Helen Cavanagh, head of member choices at XPS Pensions Group, stated: “Switch values have fallen once more throughout April as gilt yields have risen, following a reasonably secure begin to 2024. One other new low for the XPS Switch Exercise Index displays a longer-term pattern of falling switch volumes, which proceed to persist.”
The pension consultancy’s Rip-off Flag Index noticed 88% of circumstances elevating at the least one warning flag in April. This was unchanged from March 2024, and marked a decrease price than common over the earlier 12 months.
Members continued to buy annuities at an elevated price, that are at decrease threat of being the goal of scams given no funding choices are being made.
The XPS Switch Watch screens 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 exhibits 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 go away their schemes annually.
XPS Pensions Group’s Rip-off Flag Index tracks the proportion of month-to-month transfers reviewed by its rip-off safety service which might be recognized as having warning ‘flags’ which point out that the member is susceptible to being scammed. It doesn’t imply they’ve truly been scammed.
