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DB pension transfer activity at record low as values fall to lowest point in six months

DB pension transfer activity at record low as values fall to lowest point in six months

23 May 2024

The rate at which people are transferring out of their DB pensions hit a record low last month as the value of a typical transfer fell to its lowest point in six months, a new analysis from XPS Pensions Group has found.

XPS’s Transfer Activity Index hit a new low in April 2024, with an annualised rate of 14 members in every 1,000 transferring their benefits to alternative arrangements. This continues the trend of decline in transfer activity and was the fourth time the Index has fallen to a new record low in the past year.

The fall in activity comes as transfer values remain depressed. XPS’s Transfer Value Index fell by 3.4% during April 2024 to £155,000. This fall comes after a relatively stable Q1 for the Index, taking transfer values to their lowest level since October 2023. The main driver of the fall is a rise in gilt yields, which has been offset slightly by a marginal increase in long-term inflation expectations.

88% of cases reviewed by the XPS Scam Protection Service in April 2024 raised at least one scam warning flag, according to XPS’s Scam Flag Index. This was unchanged from March 2024 and marked a lower rate than average over the previous year. Members continued to purchase annuities at an increased rate, which are at lower risk of being the target of scams given no investment decisions are being made. This may be due to current market conditions resulting in favourable pricing for annuities.

Helen Cavanagh, Head of Member Options, XPS Pensions Group, said: "Transfer values have fallen again during April as gilt yields have risen, following a fairly stable start to 2024. Another new low for the XPS Transfer Activity Index reflects a longer-term trend of falling transfer volumes, which continue to persist.”

Chart 1 - XPS Transfer Value Index

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Chart 2 - XPS Transfer Activity Index

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Chart 3 – XPS Scam Flag Index

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Table 1 – Transfer Watch over the past 12 months

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  Source: XPS Pensions Group – All data is at the end of each month.


XPS Transfer Watch is part of XPSArena, a free-to-access destination for learning support and development for people in pensions.  Users will be able to scrutinise the latest data contributing to the headline Scam Flag Index, with filters available to compare warning flag prevalence over time and by several demographic groupings.

XPS Transfer Watch monitors how market developments have affected transfer values for an example member, as well as how many members are choosing to take a transfer value.

XPS Pensions Group’s 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 value changes over time with market movements. Mortality assumptions are reviewed periodically.

XPS Pensions Group’s Transfer Activity Index represent the annualised proportion of members that transfer out of pension schemes administered by XPS. If replicated across all private sector, funded, UK, DB schemes this indicates that approximately 10,000 DB members leave their schemes each year

XPS Pensions Group’s Scam Flag Index tracks the percentage of monthly transfers reviewed by the businesses’ scam protection service that are identified as having warning ‘flags’ which indicate that the member is at risk of being scammed. The flags monitored include both the DWP’s set list of amber and red warnings and further areas of concern identified and monitored by XPS’ Scam Protection Service. The service is provided to the Trustees of approximately 500 occupational pension schemes.

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