Defined benefit (DB) pension transfer activity fell to a record low in February 2025, according to XPS Group's Transfer Activity Index, which the group highlighted as evidence of increasing member caution over retirement arrangements.

In February, the index fell to the lowest observed rate since the index was established in 2018, with an annualised rate of 13 members in every 1,000 transferring their benefits to alternative arrangements.

This was the third consecutive month the index had fallen, suggesting that members are becoming increasingly cautious when making decisions about their retirement arrangements.

XPS Group senior consultant, Helen Cavanagh, highlighted the continued decline in transfer activity as demonstration of a "notable shift" in member behaviour, suggesting that this could point towards a "new norm" within the transfer landscape.

This caution is perhaps well placed, as there was also a spike in the group's Scam Flag Index, as 92 per cent of cases reviewed by the XPS Scam Protection Service in February 2025 raised at least one scam warning flag.

This is the highest level seen since June 2024 and marks a "significant increase" of 4 percentage points compared to the prior month.

However, Cavanagh clarified that, despite this increase, the average index over the past 12 months is lower than the peak observed in mid-2022 following the introduction of the transfer regulations in late 2021.

XPS Group's Transfer Value Index also remained "relatively stable", ending the month only slightly lower than at the end of January, at £146,00, due to a slight decrease in long-term inflation expectations.

---