Defined benefit (DB) pension transfer values fell by almost 2 per cent during October 2024, falling to their lowest value since October 2023, according to analysis from XPS Group.

XPS Group's Transfer Value Index showed that average DB pension transfer value stood at £153,000 at the end of October, down from £156,000 at the end of September, continuing the trend of two consecutive month-on-month decreases in the index.

According to XPS, the primary driver for falling transfer values was the recent increase in gilt yields, partly due to investor uncertainty around the Chancellor's announcement of increased borrowing in the Autumn Budget.

This has only been slightly offset by the small increase in long-term inflation expectations.

Commenting on the fall, XPS Group senior consultant, Helen Cavanagh, said: “The Transfer Value Index has reached its lowest point since October 2023, which is also the second lowest month-end position since the index was first published.

“In contrast, transfer activity saw a slight uptick, which may suggest that the volume of transfers is less sensitive to the actual sizes of the transfers compared to other factors.”

Indeed, the Transfer Activity Index increased slightly over the month of October 2024, with an annualised rate of 18 members in every 1,000 transferring their benefits to alternative arrangements.

Despite this, XPS Group said the level of transfer activity continued to be low.

Meanwhile, XPS Group’s latest Scam Flag Index found that 86 per cent of cases reviewed by its Scam Protection Service in October raised at least one scam warning flag, a fall of 1 per cent compared to the previous month.

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