High Transfer Value Annuity Interest Rate

High Transfer Value Annuity Interest Rate.

In previous news items we have suggested that low gilt yield interest rates, i.e. how much it costs the British Government to borrow money has contributed to higher transfer values.

We suggested that if the EU Referendum results in a Brexit vote, the cost of borrowing for the British Government i.e. gilt yields will rise.  This will result in pension transfer values from defined benefits schemes falling, as they are unusually high at present.

This has again been reconfirmed with the annuity interest rate (AIR), the average annuity rate for that last 12 months, that is used when calculating transfer values and TVAS critical yield calculations, is to remain at 2.1% for another month from 6^th July 2016.

Comment

This means that transfer values will remain higher at least until the start of August.