Defined benefit transfer activity has fallen to its lowest level in more than six years, according to the XPS Pensions Group.
The firm’s transfer activity index fell over February 2024 to an annualised rate of 15 in every 1,000 members transferring their benefits to alternative arrangements.
According to the firm, this is the lowest level of activity seen since its index first began in May 2018 and less than half the level measured by the index this time last year.
The group said while there was no single reason why transfer activity volumes have continued to fall, lower transfer volumes have coincided with falling transfer values which may be impacting member decision making.
Meanwhile, XPS’s transfer value index remained flat compared to last month which it said reflected greater stability of gilt and long term inflation rates in 2024.
Mark Barlow, head of member options at XPS Pensions Group, said: “Transfer values have remained flat this month, and we are seeing a continued period of values being significantly lower than prior to the gilts crisis of 2022. This may be driving the lower volumes of transfer activity.”
Additionally, 87 per cent of cases reviewed by the XPS Scam Protection Service in February 2024 raised at least one scam warning flag.
According to the XPS scam flag index this represents an increase of 3 per cent compared to January 2024, but remains below the yearly index.
XPS Pensions attributed the decrease to an increased number of annuities being purchased by members which raises fewer scam warning flags due to their nature.
“While it is positive to see that scam warning flags remain below the yearly index average, it remains important that members are provided with the right support in their decision making process to remain vigilant,” Barlow added.
alina.khan@ft.com
