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Pension transfer activity and values make a stable start to 2023

Pension transfer activity and values make a stable start to 2023

21 Feb 2023

XPS Pension Group’s Transfer Value Index rose by around 2% over the first month of 2023, ending January at £171,000. The slight increase was primarily led by a small fall in gilt yields and a slight rise in long term inflationary expectations during January, which are key assumptions in determining the value of a defined benefit pension transfer value.

XPS’s Transfer Activity Index fell slightly during January, showing an annualised rate of 39 members per 100,000 transferring out of the current scheme to an alternative arrangement. This rate is consistent with the Index over most of 2022, aside from the large spike in activity in November.

93% of cases reviewed by the XPS Scam Protection Service in January raised at least one scam warning flag, according to XPS’s Scam Flag Index. This is the third consecutive month the Index has remained at this level and the 8th month in a row where it’s been above 90%.

Mark Barlow, Head of Member Options, XPS Pensions Group, said: “Following the significant fall in transfer values over the past year, it’s perhaps unsurprising we are seeing more stability and fewer people transferring their pension. However, many schemes are continuing to brace for an influx of members wanting to transfer their pension to address the cost-of-living crisis and are implementing additional support and protection to ensure members make the right decision for their circumstances.”

Chart 1 - XPS Transfer Value Index

Transfer watch Feb 23 1.PNG

Chart 2 - XPS Transfer Activity Index
Transfer watch Feb 23 2.PNG
Chart 3 – XPS Scam Flag IndexTransfer watch Feb 23 3.PNG
Table 1 – Transfer Watch over the past 12 months
Transfer watch Feb 23 Table 1.PNG

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.

Notes to editor
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, (the bars on the chart) 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 50,000 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 350 occupational pension schemes. 

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