Defined benefit (DB) pension transfer activity continued its downward trajectory over the past month, reaching the lowest level in over five years in July, according to analysis from XPS Pension Group.

The XPS Transfer Activity Index showed an annualised rate of only 19 members per 100,000 transferring out of their current scheme to an alternative arrangement, marking the lowest level of activity seen since the index was first published in May 2018, and approximately half of the level measured by the index this time last year.

However, the group’s Transfer Value Index remained stable following recent falls, finishing the month at £161,000.

This marked the third consecutive month where little fluctuation was seen in the value index, which XPS attributed to fewer changes in gilt yields and long-term inflation expectations over the past few months, compared to more significant movements seen over 2022 and the start of 2023.

The index also revealed that whilst the proportion of transfers with at least one scam warning flag has fallen, dropping from 95 per cent in June to 93 per cent in July, this continues the prolonged trend of remaining above 90 per cent.

Commenting on the findings, XPS Pensions Group’s Member Engagement Hub client lead, Helen Cavanagh, commented: "Transfer activity levels have declined dramatically over the past five years, and this trend may have been further compounded by more recent falling transfer values.

"However, we are still seeing that most transfers are made as members approach their retirement and it is clear that transfers remain an important part of the retirement decision making process for many."

Share Story: