The number of pension transfers has fallen to the lowest level in five years, according to XPS Pensions Group’s latest data.
Thie number of transfers has been on a downward trajectory for a number of months, but July’s figure show an annualised rate of only 19 members per 100,000 transferring out of their current scheme and into an alternative arrangement.
XPS says this is around half the level of activity seen last year, and the lowest level since it started collating this data via its transfer activity index, first published in May 2018.
This decline is partly being driven by falling transfer values of DB pensions as annuity rates and interest rates have risen.
XPS’s data shows that when it comes to the size of these pension transfers, the value remain stable, at around £161,000. This has remained level for about three months. XPS says this is due to fewer changes in gilt yields or longer term inflation exceptions over recent months, compared to more significant movements over 2022 and the start of 2023.
A total of 93 per cent of cases reviewed by XPS’s scam protection service in July raised at least one scam warning flag. While this is slightly down on June’s figure it continues the prolonged and concerning trend of figures remaining above the 90 per cent mark.
XPS Pensions Group’s client lead of their member engagement hub Helen Cavanagh says: “Transfer activity levels have declined dramatically over the past five years, and this trend may have been further compounded by more recent falling transfer values.
“However, we are still seeing that most transfers are made as members approach their retirement and it is clear that transfers remain an important part of the retirement decision making process for many.”
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