Defined benefit pension transfer activity has fallen to its lowest rate since the XPS Group’s Transfer Activity Index was established in 2018.

In February, the pension consultant's index recorded an annualised rate of 13 members in every 1,000 transferring their benefits to alternative arrangements.

It was the third consecutive drop, suggesting that members are becoming more cautious and fewer are transferring their pensions. In November, for example, 20 members per 100,000 were transferring their pensions to another provider.

The transfer value index remained relatively stable over February the firm said, ending the month at £146,000, only slightly lower than at the end of January but following a trend of rapid decline in the past few years. 

The February figure was 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. The index topped £270,000 in December 2021.

The 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 inflationary increases.

In terms of scam risk, nine out of 10 cases reviewed by the XPS Scam Protection Service in February raised at least one scam warning flag, according to the firm’s Scam Flag Index. It was the highest level seen since June 2024 and marked a significant increase of 4% compared to the previous 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.” 

Transfer Watch over the past 12 months

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