Defined benefit (DB) pension transfer values fell in the middle of January 2025, before recovering “slightly” over the second half of the month, according to analysis by XPS Group.

XPS Group's Transfer Value Index showed that the average DB pension transfer value stood at £142,000 in the middle of January, which marked a record low for the index.

XPS said the main driver of the recent falls in transfer values was the trend of increasing gilt yields towards the end of 2024, which continued into the start of 2025.

However, since mid-January, gilt yields have started to fall, resulting in the January month-end position of £147,000 being slightly higher than December's months end position.

Despite this, transfer volumes remained relatively low, possibly reflecting the broader continued period of lower transfer values.

The Transfer Activity Index saw a marginal decrease in January 2025, to an annualised rate of 15 members per 1,000 transferring their benefits to alternative arrangements, a similar rate to that observed for most of the previous year.

Meanwhile, XPS Group’s Scam Flag Index found that 88 per cent of cases reviewed by the XPS Scam Protection Service in January 2025 raised at least one scam warning flag.

This represented an increase of 3 per cent compared to the previous month, but overall the index remained lower than 90 per cent for the seventh consecutive month.

Commenting on the findings, XPS Group senior consultant, Helen Cavanagh, said: "Whilst the Transfer Value Index at the end of January was relatively stable compared with the position at the end of December, the movement between these dates was volatile, with the index reaching a new low in mid-January.

“Volatility of gilt yields over the past few months shows that it is critical that members have access to high-quality support and advice to ensure they are well-informed when making decisions about their pension.”

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