Defined benefit (DB) pension transfer activity has increased slightly from the record low seen in April, whilst the value of a typical transfer has remained stable after falling to its lowest point in six months in April, analysis from XPS Pensions Group has found.

XPS’s Transfer Activity Index recorded a slight increase in May 2024, with an annualised rate of 19 members in every 1,000 transferring their benefits to alternative arrangements, up from 14 members in every 1,000 in April.

However, XPS noted that the index remained below 20 members in every 1,000 for the sixth consecutive month, reflecting the continued long-term trend of low transfer volumes.

XPS’s Transfer Value Index also showed a slight increase in the value of DB pension transfers over the past month, rising from £155,000 to £156,000, following a 3.4 per cent fall in April.

Whilst April saw the lowest average transfer value in six months, XPS highlighted the latest improvement as demonstration of a "continued period of stability" for the index, with month-end values fluctuating within a £5,000 range since the start of the year.

In particular, the firm said that this stability reflects the small increases in gilts yields, coupled with similar increases in long term inflation, resulting in lower volatility in transfer values.

Commenting on the latest figures, XPS Pensions Group senior consultant, Helen Cavanagh, said: "We continue to see a long-term trend of low transfer volumes, alongside relatively stable transfer values, throughout 2024.

“Among those transferring, whilst the majority are still transferring to personal pensions, we continue to see an increasing number are opting to purchase annuity policies, likely due to more competitive pricing driven by higher gilt yields.”

The firm also shared the latest figures from the XPS Scam Flag Index, revealing that 89 per cent of cases reviewed by the XPS Scam Protection Service in May raised at least one scam warning flag.

However, XPS noted that whilst its Scam Flag Index showed a small 1 percentage point increase on the previous month, this marked a lower rate than average over the previous year, and is the fifth consecutive month that the index has remained below 90 per cent.

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