Accessibility tools

Pension transfer values fall by over a third during 2022 due to rising gilt yields

Pension transfer values fall by over a third during 2022 due to rising gilt yields

24 Jan 2023

  • Rise in gilt yields drives transfer values lower
  • Investor concern over UK economy at heart of gilt yield surge
  • No evidence of cost of living crisis driving transfer decisions

Defined benefit transfer values have fallen precipitously over 2022 as investor concerns over UK debt drove government bond (gilt) yields higher, analysis by XPS Pensions Group has found.

XPS Pension Group’s Transfer Value Index fell by 4% over the month of December, and the tracker shows that transfer value fell a total of 36% over the year as a result of significant rises in gilt yields.

UK gilt yields have risen sharply throughout 2022 reflecting investors’ concerns about the impact of inflation on the country’s economy and the prospect of a widely predicted recession in 2023. Gilt yields are a major factor in determining the value of a defined benefit pension upon transfer.

As transfer values fell, demand for transfers also contracted in 2022. XPS Pension Group’s Transfer Activity Index showed that average transfer activity across 2022 was 44 members per 100,000, down from the 62 per 100,000 across 2021. The numbers for December 2022 were in line with annual averages, following a spike in November.

2022 also saw a significant increase in the number of transfers being flagged as showing potential signs of a scam. 87% of cases in 2022 showed scam ‘warning flags’, up from 52% the preceding year. This was largely down to new legislation introduced in late 2021 which, amongst other things, required that any transfer going into a vehicle with overseas investments raises a scam warning flag. During December 2022, at least one potential scam warning sign was identified in 93% of the cases reviewed.

Mark Barlow, Head of Member Options, XPS Pensions Group, said: “Transfer values have plummeted over the last year, which will be a cause of concern for many members. It makes access to high quality support and advice more important than ever before members make potentially irreversible decisions that could impact their retirement. However, it’s reassuring that, as yet, we have not seen a sustained trend of more members transferring due to cost-of-living pressures.”

Chart 1 - XPS Transfer Value Index
Transfer Watch Jan 23 1.png

Chart 2 - XPS Transfer Activity Index

Transfer Watch Jan 23 2.png

Chart 3 – XPS Scam Flag Index

Transfer Watch Jan 23 3.png

Table 1 – Transfer Watch over the past 12 months

Transfer Watch Jan 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. View here more about Transfer Watch in Arena.


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. 

Back to press releases