Average defined benefit pension values have fallen to their lowest rates since the XPS Group’s Transfer Watch was established in 2018.

The pension consultant's transfer value index ended March at a new record low of £142,000.

Throughout this year so far the index has remained below £150,000, the firm said, with the lowest mid-month figure also recorded in March.

XPS said the main driver of the decline was a further increase in gilt yields, coupled with falling long term inflation expectations.

It added that while the latter part of the quarter saw increased volatility in equity markets due to the initial US tariff announcements, the longer-term impact on the wider financial markets is yet to be seen.

There was a large jump in the transfer activity index in March, with an annualised rate of 21 members in every 1,000 transferring their benefits to alternative arrangements.

It is the first time the index has surpassed an annualised rate of 20 members since July 2024, and reverses the downward trend that has been observed over the past few months, the firm said.

The uptick in transfer activity may indicate a growing confidence among members in choosing a pension transfer as a retirement planning option, despite the current market uncertainty, XPS said.

Helen Cavanagh, senior consultant, XPS Group, said: "Despite record-low transfer values, we saw an uptick in transfer activity in early 2025. Due to the ongoing uncertainty over tariffs and potential trade deals with the US, markets are likely to remain volatile late into this year.

“It is more important than ever that members fully understand their benefit entitlements and that they receive high quality independent financial advice when planning for their retirement, particularly if transferring is an option they are considering.”

During the month, 85% of cases reviewed by the XPS Scam Protection Service raised at least one scam warning flag. That represented a 7% drop from the previous month, marking the largest single-month change since mid-2023. The Index fluctuated throughout the first quarter of 2025, but fell back to figures seen in previous months.

Transfer Watch over the past 12 months

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