Defined benefit pension transfer values rose in February with Coronavirus fears spurring the rise, according to the XPS Transfer Watch Index, a monthly study of transfer values.

While transfer values rose in February the number of members taking a transfer value dipped slightly.

The XPS Transfer Watch monitors how market developments have affected transfer values.

The Transfer Value Index shows the estimated Cash Transfer Value of a 64 year old member with a pension of £10,000 a year with typical inflation increases.

The Transfer Value Index rose from £245,800 at the end of January, to £249,700 at the end of February, continuing the increase see in the first month of 2020.

The movement was driven by a 0.1% fall in gilt yields, with inflation expectations unchanged.

There was a decrease in the number of transfers completed in February, to an annual equivalent of 0.89% of eligible members, down from 1.03% in January.

XPS said the Coronavirus outbreak was hitting global financial markets and resulting in “a serious deterioration in the asset values of many pension schemes.”

The company said that there was also a fall in gilt yields over the month, likely due to economic stagnation in the UK and the possibility of central bank intervention

Mark Barlow, partner, XPS Pensions Group, said: “As a result of market turbulence, transfer values have continued their recovery towards the record levels seen in the third quarter of 2019.

“February has seen significant volatility in the financial markets and understandably this has largely been attributed to Coronavirus.

“The outbreak and concerns of a pandemic have led to an increase in transfer values, resulting from the fall in gilt yields, as investors have turned to safe havens.

“Many schemes will have seen their funding levels dented by this market turbulence and so those schemes experiencing high levels of transfer activity, or running a member options exercise, may wish to consider whether their transfer value basis remains affordable.”