Transfer Activity index fell to record low in February 2025, indicating increasing member caution over retirement arrangements
Transfer Activity index fell to record low in February 2025, indicating increasing member caution over retirement arrangements
24 Mar 2025
XPS Group’s Transfer Activity Index has fallen to the lowest observed rate since the Index was established in 2018. In February 2025, there was an annualised rate of 13 members in every 1,000 transferring their benefits to alternative arrangements. This was the third consecutive month the Index had fallen, suggesting that members are becoming increasingly cautious when making decisions about their retirement arrangements.
Meanwhile, XPS Group’s Transfer Value Index remained relatively stable over February 2025, ending the month only slightly lower than at the end of January, at £146,000. This is in line with the previous lowest month-end value recorded in December 2024 and was in part driven by a slight decrease in long-term inflation expectations.
92% of cases reviewed by the XPS Scam Protection Service in February 2025 raised at least one scam warning flag, according to XPS Group’s Scam Flag Index. This is the highest level seen since June 2024 and marks a significant increase of 4% compared to the prior month.
Helen Cavanagh, Senior Consultant, XPS Group, said: "The continued decline in transfer activity highlights a notable shift in member behaviour and could point towards a new norm within the transfer landscape. Although we have observed a jump in the Scam Flag Index this month, the average Index over the past 12 months is lower than the peak we observed in mid-2022 following the introduction of the transfer regulations in late 2021.”
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.