In July only 19 members per 100,000 transferred their pensions out of their current scheme to an alternative, according to the XPS Pension Groups’ Transfer Activity Index.

XPS says the figure represents the lowest level of activity seen since the Transfer Activity Index was first published in May 2018 and is approximately half of the level measured this time last year.

The FCA has tightened rules on pension transfers in recent times in the face of a wave of firm failures and questions about the quality of advice. However, pension transfers remain a key component of many financial plans, says XPS.

Helen Cavanagh, a client lead at XPS Pensions Group, said: "Transfer activity levels have declined dramatically over the past five years, and this trend may have been further compounded by more recent falling transfer values. However, we are still seeing that most transfers are made as members approach their retirement and it is clear that transfers remain an important part of the retirement decision-making process for many."

The XPS Pension Group’s Transfer Value Index - measuring the average value of transfers - continues to remain stable, finishing the month at £161,000, similar to the previous month. XPS says this is due to fewer changes in gilt yields and long-term inflation expectations over the past few months, compared to more significant movements in 2022 and the start of 2023.

Some 93% of cases reviewed by The XPS Scam Protection Service in July raised at least one scam warning flag, according to XPS’s Scam Flag Index. While the figure represents a slight fall compared to June, it continues the prolonged trend of this index remaining above 90%.

• 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 Transfer Watch over the past 12 months

Source: XPS Pensions Group – All data is at the end of each month