XPS’s Transfer Value Index fell to £149,100 on 19 October.

The Index rallied slightly to finish the month at £152,000, but that was still 3% lower than the end of September, the lowest month-end value recorded since the Index was launched in 2018.

The decrease continued the downward trend of transfer values since June 2023, said XPS. The main reason is the continued increase in gilts yield paired with slightly lower long-term inflation expectations, it said.

XPS’s sister Transfer Activity Index saw a small increase in October, to an annualised rate of 22 members in every 1,000 transferring their benefits to alternative arrangements.

The volume of activity over the past few months has stabilised, with only small incremental changes being observed, XPS said.

Some 84% of cases reviewed by the separate XPS Scam Protection Service in October raised at least one scam warning flag, according to XPS’s Scam Flag Index.

It is only the second time since May 2022 that this index has fallen below 90%. The fall was down to an increased number of members choosing to purchase immediate annuities, which may be due to favourable pricing reflecting current market conditions. Since no investment decisions are required when purchasing annuities, such transactions are lower risk.

Mark Barlow, partner at XPS Pensions Group, said: “The combination of high gilt yields and lower long-term inflation expectations is driving down transfer values, making it a difficult time for anyone who wants to transfer out of their DB pension.

“Transferring could still be the right decision, particularly with attractive annuity rates available, but it’s crucial that pension scheme members are getting quality support and financial advice before making any decisions about how to access their pension.”