XPS Pension Group’s transfer value index fell by around 4% over February to £168,000 – the lowest month-end value since the index was first published in June 2016.
The consultancy said the decrease was primarily due to a steady rise in gilt yields throughout February.
The firm's transfer activity index rose only slightly during the month - showing an annualised rate of 42 members per 100,000 transferring out of the current scheme to an alternative arrangement.
It said this activity was in line with what it had seen over the past year, suggesting a stabilisation in transfer rates.
The firm also found that some 92% of transfer cases reviewed by its scam protection service in February raised at least one warning flag - representing a slight fall from the previous three months, although the Index has remained above 90% since June 2022.
Transfer watch over the past 12 months
|
|
2022 |
2023 |
||||||||||
|
|
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
Jan |
Feb |
|
XPS Transfer Value Index (£000s) |
249 |
245 |
217 |
203 |
210 |
197 |
181 |
175 |
179 |
171 |
175 |
168 |
|
XPS Transfer Activity Index (%) |
0.38 |
0.35 |
0.37 |
0.29 |
0.41 |
0.38 |
0.38 |
0.48 |
0.87 |
0.44 |
0.39 |
0.42 |
|
XPS Scam Flag Index (%) |
70 |
78 |
83 |
97 |
94 |
91 |
97 |
96 |
93 |
93 |
93 |
92 |
Source: XPS Pensions Group - All data is at the end of each month
How XPS' figures are calculated
XPS Pensions Group's 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.
The 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.
The consultant's transfer activity index represents the annualised proportion of members that transfer out of pension schemes administered by XPS. If replicated across all private sector, funded, UK defined benefit (DB) schemes this indicates that approximately 50,000 DB members leave their schemes each year.
The firm'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 Department for Work and Pensions' set list of amber and red warnings and further areas of concern identified and monitored by XPS' scam protection service, which is provided to the trustees of approximately 350 occupational pension schemes.
