Are Pension Transfer Values Going Up?

If you’re reviewing your retirement planning strategy, you may be wondering whether the value of your pension transfer is increasing - and what that actually means for your long-term finances.

It’s a question many people are asking, especially in the current economic climate where market fluctuations, inflation, and interest rates are influencing pension valuations.

In this article, we’ll explain what pension transfer values are, why they change, and what you can do to make the most of them.

Whether you’re part of a defined benefit scheme or have a personal pension, understanding the current trends and key drivers of pension transfer values is essential if you’re thinking about moving your pension to a new provider.

What Is a Pension Transfer Value?

A pension transfer value is the amount of money your current pension provider is willing to offer you if you decide to move your pension pot to another scheme.

Defined Contribution (DC) vs. Defined Benefit (DB) Transfers

• Defined Contribution Pensions: The transfer value is usually just the value of your pension pot, based on your contributions plus investment returns.

• Defined Benefit Pensions: The transfer value is a cash equivalent of the promised retirement income, also known as a Cash Equivalent Transfer Value (CETV).

CETVs are especially important because they represent a significant financial decision, you’re effectively giving up a guaranteed income for life in exchange for a lump sum that you can invest and manage yourself.

Are Pension Transfer Values Increasing?

Defined Contribution (DC) Transfer Values

For DC pensions, the transfer value is based on:

• The current value of investments in the pension fund.

• Any charges or fees imposed by the provider.

• Market performance and fund volatility.

As a result, DC pension transfer values fluctuate daily based on investment returns. If the market has performed well, your pension pot, and therefore your transfer value, is likely to be higher. In this sense, yes, transfer values can go up, but they can just as easily go down.

Defined Benefit (DB) Transfer Values

CETVs are influenced by several key economic and scheme-specific factors:

• Interest rates/gilt yields: There’s an inverse relationship between interest rates and transfer values. When interest rates fall, CETVs rise, and vice versa.

• Inflation expectations: If inflation is high, schemes may adjust their CETVs to account for future cost-of-living increases.

• Your age and life expectancy: Younger members generally receive higher transfer values, as the scheme needs to account for a longer retirement period.

• Scheme funding status: Well-funded schemes may offer more competitive CETVs, while underfunded schemes may not.

In recent years, transfer values have seen notable changes due to economic instability and monetary policy decisions. For example:

• During the low-interest era (post-2008 to 2021), DB transfer values were historically high.

• Following rapid interest rate hikes in 2022–2023, many schemes saw a sharp decline in transfer values.

• In 2024–2025, with stabilisation in the financial markets, some schemes have started to adjust and offer slightly higher transfer values again, especially if inflation moderates and funding levels improve.

Why Do Pension Transfer Values Change?

There are a number of reasons why your pension’s transfer value might go up or down. Here are the main drivers:

1. Interest Rates

Perhaps the biggest factor for DB pensions, rising interest rates usually result in lower transfer values. This is because the cost to the scheme of meeting future pension payments is reduced in a higher interest environment. Conversely, lower interest rates mean the scheme has to set aside more capital to meet its obligations, resulting in higher CETVs.

2. Market Conditions

If your pension is invested in the stock market or bonds (common in DC pensions), your transfer value is directly affected by market performance. A bull market could significantly increase your pot, while a downturn could erode it.

3. Scheme Health

A well-funded pension scheme can afford to offer more generous transfer values. If your scheme is under pressure -say, from rising liabilities or reduced contributions - it may restrict or reduce its CETVs.

4. Regulatory Changes

Occasionally, changes to pension regulations can influence transfer values.

For example, the removal of the Lifetime Allowance (LTA) in 2024 has allowed more flexibility in how pensions are assessed, but the introduction of lump sum limits may influence how schemes calculate their transfer offers in the long term.

Is Now a Good Time to Transfer?

There’s no definitive answer because it depends on your personal circumstances and the broader financial environment.

However, if your DB scheme is currently offering a higher-than-average CETV, and you’re close to retirement or looking for greater flexibility, it might be a good time to consider a transfer.

Likewise, if your DC pot has benefitted from market gains, locking in that value with a transfer could make sense.

That said, timing a pension transfer purely to chase a better transfer value is risky. You must also consider:

• Your long-term income needs

• Tax implications of accessing your pension

• The investment risks you’re willing to take on

• Potential benefits you’d lose (such as spouse pensions or inflation protection in DB schemes)

How to Check Your Pension Transfer Value

To find out your current transfer value:

1. Request a transfer value statement from your scheme or pension provider.

2. If you’re in a DB scheme, ask for your Cash Equivalent Transfer Value (CETV).

3. Review the statement in detail - it should include how long the value is guaranteed for (often 3 months), any charges that apply, and the assumptions used in the calculation.

You may also want to speak to a financial adviser to understand how the offer compares to others in the market and what it means for your retirement planning.

Should You Transfer Your Pension If the Value Has Gone Up?

It’s tempting to take advantage of a high transfer value, but this is not a decision to take lightly.

Benefits of Transferring When Values Are High

• Greater control over how your pension is invested.

• Flexibility in accessing retirement income (drawdown vs. annuity).

• Potential to leave unspent funds as part of your estate.

• Opportunity to consolidate pensions and reduce admin.

Risks of Acting on a High Transfer Value

• Loss of guaranteed income (particularly for DB pensions).

• Exposure to investment risk.

• Potential tax consequences if you access the funds too early.

• Missed out benefits like death-in-service or spouse pensions.

The FCA mandates that regulated financial advice is required for all DB transfers over £30,000 for this reason.

What to Do If Your Transfer Value Has Gone Down

If you’ve noticed your pension transfer value has recently decreased, don’t panic. It’s not uncommon, particularly in response to changes in interest rates or market volatility.

Here’s what to consider:

• Wait and reassess: If you’re not retiring soon, you may have time for values to recover.

• Diversify investments: If in a DC scheme, evaluate your portfolio with a professional.

• Explore other income sources: Consider ISAs, general investment accounts, or annuities.

• Review retirement goals: A lower transfer value might shift your retirement timeline or strategy.

Professional Advice Matters More Than Ever

Given how volatile and complex pension valuations can be, especially in defined benefit schemes, professional advice is essential.

At Belgravia Capital Wealth Management, we provide:

• In-depth analysis of your CETV or DC pot

• Guidance on whether a transfer makes financial and tax sense

• Long-term retirement planning tailored to your needs and risk tolerance

• Full regulatory compliance and transparency

We help clients across the UK navigate complex pension decisions with clarity and confidence.

Ready to Review Your Pension Transfer Value?

If you’re thinking about transferring your pension and want expert, tailored advice based on your current transfer value, we’re here to help. Understanding what your pension is worth today—and what that means for your financial future—could be one of the most important decisions you make in retirement planning.

Email us at contact@belgraviacapital.co.uk

Or use our website to arrange a free consultation with a qualified pension transfer adviser.