Values decreased by 3% in September to £154,000, 15% lower than a year ago.

According to XPS, the primary driver of this fall has been the increase in gilt yields.

Gilt yields have increased, while inflation expectations have remained stable following the Bank of England’s decision not to raise interest rates in September.

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’s Transfer Activity Index also fell in September to an annualised rate of 21 members in every 1,000 transferring their benefits to alternative arrangements. The volume of activity over Q3 2023 is considerably lower than the previous quarter, while also remaining close to the lowest recorded value of the Index recorded in July 2023.

The number of potential scams identified rose slightly in September.

Over the month 92% of cases reviewed by the XPS Scam Protection Service raised at least one scam warning flag. This represents an increase from 86% from the previous month and has seen the Index return to a similar level to that observed since the introduction of the 2021 transfer regulations.

XPS said the rise of scam warning flags follows the spike in volumes of members transferring to purchase an annuity, which has a lower risk of scam activity, falling back to the levels seen in previous months. 

Helen Cavanagh, client lead at XPS Pensions Group’s member engagement hub, said: “With the Transfer Value Index falling to a record month-end value, we’ve also seen the number of members electing to transfer remaining low. This continues the trend of falling transfer activity, with two months of the last quarter containing the lowest transfer volumes we have witnessed since starting the Index.

"It may be that lower transfers values are resulting in fewer members concluding that transferring is the best option for them.”