The Times, Saturday 7 April 2018
Interest rates are expected to rise from their near-record lows this year. This is good news for savers who have endured more than a decade of low rates. However, if you are contributing to a pension, the news may not be so good, particularly if your fund holds a large amount of gilts (government bonds that pay a fixed rate of interest). You may also receive less if you transfer out of your company pension. We answer your questions...
..."I am thinking of taking a transfer from my company pension. Should I act now?"
James Baxter, the managing partner of Tideway Investment Partners, an investment manager, says: “Gilt yields reached a low of 0.16 per cent in 2016 and have risen to 1.2 per cent. If yields were to go back to where they were prior to the Brexit vote [June 2016] you could see 10 to 15 per cent come off transfer values.
“If interest rates rise, then you will see downward pressure on transfer values.”
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