Defined benefit (DB) transfer activity appears to have settled down to a 'new normal' since it peaked in Q4 2021, although rising transfer values could lead to growing member interest in the year ahead, according to analysis from Barnett Waddingham.

The tracker showed that while DB transfer activity reached a record high in Q4 2021, the number of members transferring out of schemes after this fell for seven consecutive quarters, reaching an all-time low in Q3 2023.

Since then, transfer activity appears to have settled down to a 'new normal', at levels much lower than seen before 2022.

However, Barnett Waddingham pointed out that while cash equivalent transer value (CETV) activity continues to be mooted by historical standards, Q4 2023 bucked the trend, with 15 per cent more members transferring out over the final quarter of the year than in the previous one.

And growing interest could be seen in future, as Barnett Waddingham suggested that rising CETV amounts seen in Q4 2023 could offer further encouragement for members to transfer.

Commenting on the latest update, Barnett Waddingham partner, Liam Mayne, said: “With typical CETV amounts rising in recent months in response to falling bond yields, it will be interesting to see whether this trend continues into 2024.

"If member appetite to consider the transfer option continues to increase, trustees and sponsors may find it worthwhile to review their transfer processes to ensure they are fit for purpose given the significant changes in the financial landscape in recent years.”

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