Pensions - Articles - DB pension transfer activity increases marginally in May

 XPS’s Transfer Activity Index saw a slight increase in May 2024, reaching an annualised rate of 19 members in every 1,000 transferring their benefits to alternative arrangements, up from 14 members in every 1,000 in April. Despite this, the Index remained below 20 members in every 1,000 for the sixth consecutive month reflecting the continued long-term trend of low transfer volumes.

 Meanwhile, XPS’s Transfer Value Index increased slightly during May 2024 from £155,000 to £156,000 after a decline of 3.4% during April. This marks a continued period of stability for the Index, with month-end values fluctuating within a £5,000 range since the start of the year. This stability reflects the small increases in gilts yields, coupled with similar increases in long term inflation, resulting in lower volatility in transfer values.

 According to XPS’ Scam Flag Index, 89% of cases reviewed by the XPS Scam Protection Service in May raised at least one scam warning flag. This represents a small increase of 1% compared to the previous month. This marked a lower rate than average over the previous year, and is the fifth consecutive month that the index has remained below 90%.

 Helen Cavanagh, Senior Consultant, XPS Pensions Group, said: "We continue to see a long-term trend of low transfer volumes, alongside relatively stable transfer values, throughout 2024. Among those transferring, whilst the majority are still transferring to personal pensions, we continue to see an increasing number are opting to purchase annuity policies, likely due to more competitive pricing driven by higher gilt yields.”