Defined benefit (DB) transfer activity fell to the lowest level in over six years in February, with XPS's Transfer Activity Index revealing an annualised rate of 15 in every 1,000 members transferring their benefits to alternative arrangements.

This is the lowest level of activity seen since the index first began in May 2018, and less than half the level measured by the index this time last year (0.42 per cent in February 2023).

XPS explained that whilst there is no single reason why transfer activity volumes have continued to fall, lower transfer volumes have coincided with falling transfer values, which may be impacting member decision making..

Indeed, XPS’s Transfer Value Index also remained flat in February, reflecting greater stability of gilt and long-term inflation rates in early 2024.

Commenting on the findings, XPS Pensions Group head of member options, Mark Barlow, said: “Transfer values have remained flat this month, and we are seeing a continued period values being significantly lower than prior to the gilts crisis of 2022.

"This may be driving the lower volumes of transfer activity. Whilst it is positive to see that scam warning flags remain below the yearly index average, it remains important that members are provided with the right support in their decision-making process to remain vigilant”.

The latest update from XPS Pensions also revealed a slight increase in the number of pension scam warning flags, with 87 per cent of cases reviewed by the XPS Scam Protection Service in February 2024 raising at least one scam warning flag, up from 84 per cent in January 2024.

XPS clarified, however, that despite the recent increase, this remains below the yearly index (92 per cent in February 2023), attributing the year-on-year fall to an increase in retirees purchasing annuities, which raise fewer scam warning flags because they are not investment products.

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