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Typical DB transfer values fall to near record lows

Typical DB transfer values fall to near record lows

27 Nov 2023

The transfer value a typical DB pension could expect to attract fell below £150,000 in October. This marked the first time since last year’s mini budget that transfer values have dropped so low.

On 19 October, XPS’s Transfer Value Index fell to £149,100, the first time is has dipped below £150,000 since the immediate aftermath of last year’s mini budget. The Index rallied slightly to finish the month at £152,000, 3% lower than the end of September. This was lowest the month-end value that has been recorded since the Index was first published in 2018.

This decrease continues the downward trend of transfer values since June 2023.The primary driver for the further fall in transfer values is the continued increase in gilts yield paired with slightly lower long-term inflation expectations.

XPS’s Transfer Activity Index saw a small increase over October 2023, to an annualised rate of 22 members in every 1,000 transferring their benefits to alternative arrangements. The volume of activity over the past few months has stabilised, with only small incremental changes being observed.

84% of cases reviewed by the XPS Scam Protection Service in October raised at least one scam warning flag, according to XPS’s Scam Flag Index. This is only the second occasion since May 2022 that the index has fallen below 90%. This fall can be attributed to an increased number of members choosing to purchase immediate annuities, which may be due favourable pricing reflecting current market conditions. Since no investment decisions are required when purchasing annuities, such transactions are lower risk.

Commenting on the figures, Mark Barlow, Partner at XPS Pensions Group, said: “The combination of high gilt yields and lower long-term inflation expectations is driving down transfer values, making it a difficult time for anyone who wants to transfer out of their DB pension. Transferring could still be the right decision, particularly with attractive annuity rates available, but it’s crucial that pension scheme members are getting quality support and financial advice before making any decisions about how to access their pension.”

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 20,000 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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