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Defined Benefit Transfer Values


Research by pension consultancy Xafinity stated that defined benefit transfer values rose by almost 2 per cent in February, pushing them close to last October's record highs.  An article published in the FT Adviser goes on to say that at the end of the month, a £10,000-a-year pension would have bought on average £237,000.  That represented a month-on-month increase of £4,400 - or 1.9 per cent - and brought the average transfer to within £6,700 of its October high.  The increase can largely be explained by the fall in gilt yields, which began around the time prime minister Theresa May unveiled her plans to trigger Article 50 at the end of January.  Lower gilt yields result in higher transfer values, because they increase the cost to a DB scheme of meeting its obligations to members.