XPS’s Transfer Activity Index fell in February to an annualised rate of 15 in every 1,000 members transferring their benefits to alternative arrangements.

This is the lowest level of activity seen since the index first began in May 2018 and is less than half the level recorded by the index this time last year.

While there is no single reason why transfer activity volumes have continued to fall, XPS said lower transfer volumes have coincided with falling transfer values which may be impacting member decision making.

The pension consultancy’s Transfer Value Index (showing a typical transfer value) remained flat compared to last month, at £158,000, reflecting a greater stability of gilt and long term inflation rates in early 2024.

The Scam Protection Service red flag numbers also remained broadly stable with 87% of cases reviewed by the XPS Scam Protection Service in February 2024 raising at least one scam warning flag, according to XPS’s Scam Flag Index. This represents an increase of 3% compared to January but remains below the yearly index.

This fall was driven in part by an increase in retirees purchasing annuities which raise fewer scam warning flags because they are not investment products.

Mark Barlow, head of member options at XPS Pensions Group, said: “Transfer values have remained flat this month, and we are seeing a continued period of values being significantly lower than prior to the gilts crisis of 2022. This may be driving the lower volumes of transfer activity.

“Whilst it is positive to see that scam warning flags remain below the yearly index average, it remains important that members are provided with the right support in their decision-making process to remain vigilant.”

The 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 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 Pensions 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 20,000 DB members leave their schemes each year.

XPS Pensions Group’s Scam Flag Index tracks the percentage of monthly transfers reviewed by its scam protection service that are identified as having warning ‘flags’ which indicate that the member is at risk of being scammed. It does not mean they have actually been scammed.