DB pension transfer activity hits 4-year low

Defined benefit (DB) pension transfer activity fell to the lowest rate in four years in December, according to XPS Pension Group’s Transfer Value Index, with an annualised rate of 50 members out of every 10,000 transferring their pension.

The average DB pension transfer value also fell by 5 per cent in December to an average of £258,000, after reaching a record high of £270,000 at the end of November, with this decrease attributed to a rebound in gilt yields over the past month.

The XPS Pension Scam Flag Index, meanwhile, has remained below 50 per cent for the fourth consecutive month, with 41 per cent of transfers showing at least one warning sign of a potential scam in December, compared to a record high of 76 per cent this time last year.

Commenting on the update, XPS Pensions Group head of member options, Mark Barlow, emphasised that whilst there is often a slump in transfer activity over the festive period, this is the lowest rate of transfers seen since the index was started in 2018.

“Although it’s unlikely to be affecting activity significantly yet, it’s interesting that this fall comes immediately after the introduction of the new transfer regulations, which provided trustees with the power to block transfers," he said.

Adding to this, XPS Pensions Group member engagement hub client lead, Helen Cavanagh, said: “Although the Scam Index remains at a high level, given all the recent focus on preventing pension scams, it’s encouraging to see a fall in the number of transfers displaying warning signs of a pension scam.

“With the new government regulations in force placing more requirements on trustees, it’s important that they are able to understand the landscape of how scams might be affecting their members.”

    Share Story:

Recent Stories

DB risks
Laura Blows discusses DB risks with Aon UK head of retirement policy, Matthew Arends, and Aon UK head of investment, Maria Johannessen, in Pensions Age's latest video interview

Sustainable equity investing in emerging markets
In these highlights of the latest Pensions Age video interview, Laura Blows speaks to Premier Miton Investors fund managers, Fiona Manning and Will Scholes, about sustainable investing in equities within emerging markets

High-yield Investing
Laura Blows discusses short duration global high-yield strategies with Royal London Asset Management head of global credit, Azhar Hussain, in the latest Pensions Age podcast
Sustainable Investing
Laura Blows speaks to Royal London Asset Management sustainable fund manager, George Crowdy, about global sustainable equity investing