Defined benefit (DB) pension transfer values fell to a new month-end low in May 2025, according to XPS Group's Value Index, marking a third consecutive monthly record low.

The index fell to £137,000 at the end of the month, matching the mid-month low in April 2025.

XPS Group said the decline reflected "small increases" in gilt yields across the month, whilst future inflation expectations have remained stable.

In addition to the fall in transfer values, the group's transfer activity index fell marginally over May 2025, to an annualised rate of 22 members per 1,000 transferring their benefits to alternative arrangements.

Despite the fall, XPS pointed out that this is the first time since 2023 that the index has seen three consecutive months with an annualised rate greater than 0.2 per cent.

However, it clarified that, while a small increase has been observed, activity levels remain significantly lower than before the September 2022 gilts crisis.

XPS Group's Scam Flag Index also saw a marginal increase over May, as 85 per cent of cases reviewed by the XPS Scam Protection Service in May 2025 raised at least one scam warning flag, up from 83 per cent in April.

However, the group said that although still elevated, scam warning flags remained below the peak seen in 2022 following the introduction of the new transfer regime.

XPS Group senior consultant, Helen Cavanagh, said: "For the third consecutive month, we've observed a new month-end low for the Transfer Value Index, which reflects continued increases in gilts yields, coupled with greater stability in long-term inflationary expectations.

"Despite this, transfer volumes have stabilised over the past few months at a higher level than observed earlier in the year, albeit at a much lower level than before the 2022 mini-budget, when observed transfer values were significantly higher."

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