Defined benefit (DB) transfer values continued to fall in Q2 2023 despite a slight rebound in June, with DB transfer activity also falling to a record low over the past month, analysis from XPS Pensions Group has found.

The XPS Transfer Value Index showed that, despite a slight rebound in values over the month of June, with the month end position of £162,000 almost 2 per cent higher than at the end of May, transfer values ended the quarter down 8 per cent on Q1.

The Transfer Activity Index also continued to fall over June, with an annual rate of 25 members in every 1,000, marking the lowest recorded rate of transfers since the Index commenced.

Broader trends also remained consistent, an average age of transferring members in Q2 of 58, up from an average of 56 years old in 2019, continuing the rise seen in recent years.

Commenting on the findings, XPS Pensions Group head of member options, Mark Barlow, stated: “With continued falls in transfer values seen this quarter, it’s unsurprising that fewer members are taking the decision to transfer their pension.

"However, we are still seeing members investigating transfers as part of their retirement planning, particularly since annuity rates have improved so substantially.”

XPS's Scam Flag index also hit a new high for 2023 in June, with 95 per cent of cases reviewed by the XPS Scam Protection Service during the month raising at least one scam warning flag.

However, XPS noted that while the index itself has remained over 90 per cent since June 2022, this has been primarily driven by the overseas investment flags, with concerns over this flag recently highlighted as part of the government's review of the pension transfer regulations.

XPS Pensions Group’s Member Engagement Hub client lead, Helen Cavanagh, added: “XPS welcomes the Department for Work and Pensions' commitment to consider changes to the transfer regulations.

"In particular, we would like to see any changes address the practical issues of the overseas investment flag. This accounts for 40 of all flags raised by XPS, and is the primary driver for our Scam Flag Index remaining over 90 per cent since the legislation was introduced.”

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