Defined benefit (DB) pension transfer values fell by 3.9 per cent to £158,000 in January, following two consecutive rises at the end of 2023, XPS's Transfer Value Index has revealed.

According to XPS, the primary driver for the decrease was a fall in gilt yields during the first month of 2024, with long-term inflation remaining flat.

Whilst XPS’s Transfer Activity Index saw a marginal increase over January 2024, to an annualised rate of 19 members in every 1,000 transferring their benefits to alternative arrangements, XPS emphasised that transfer activity still remained at a very low level.

The XPS Scam Flag index, meanwhile, showed that there have been some recent improvements, as 84 per cent of cases reviewed by the XPS Scam Protection Service in January raised at least one scam warning flag.

This represented a 6 per cent fall compared to December 2023, and is only the third time the index has decreased to below 90 per cent in the past year.

XPS suggested that this could be a result of an increased number of annuities being purchased by members due to current market conditions resulting in favourable pricing, noting that such transfers are lower risk as no investment decisions are made upon purchase of an annuity, so fewer scam warnings flags are raised.

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