DB Transfer Values hit Index low in mid-January before recovering by month-end
DB Transfer Values hit Index low in mid-January before recovering by month-end
25 Feb 2025
Following a month-end low in December 2024, XPS Group’s Transfer Value Index continued to fall until mid-January 2025, reaching a record low for the Index of £142,000, before recovering slightly over the second half of the month. The trend of increasing gilt yields towards the end of 2024 continued into the start of 2025, which has been the main driver behind the recent falls in transfer values. However, since mid-January, gilt yields have started to fall again, resulting in the January month-end position of £147,000 being slightly higher than that of the previous month end.
Elsewhere, transfer volumes remain relatively low, which may be reflective of a continued period of lower transfer values. Over January 2025, XPS Group’s Transfer Activity Index saw a marginal decrease to an annualised rate of 15 members in every 1,000 transferring their benefits to alternative arrangements, a similar rate to that observed for most of 2024.
88% of cases reviewed by the XPS Scam Protection Service in January 2025 raised at least one scam warning flag, according to XPS Group’s Scam Flag Index. This was an increase of 3% compared to the previous month, but overall the Index remained lower than 90% for the seventh month in a row.
Helen Cavanagh, Senior Consultant, XPS Group, said: "Whilst the Transfer Value Index at the end of January was relatively stable compared with the position at the end of December, the movement between these dates was volatile, with the Index reaching a new low in mid-January.
The volatility of gilt yields over the past few months shows that it is critical that members have access to high-quality support and advice to ensure they are well-informed when making decisions about their pension.”
Chart 1 - XPS Transfer Value Index
Chart 2 - XPS Transfer Activity Index
Chart 3 – XPS Scam Flag Index
Table 1 – Transfer Watch over the past 12 months
Source: XPS Group – All data is at the end of each month.
Notes:
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 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 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 10,000 DB members leave their schemes each year
XPS 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 500 occupational pension schemes.