DB pension transfer values fell in January, reversing the trend seen in the previous two months.
Accordion got XPS’s Transfer Value Index, the primary driver for this decrease has been a fall in gilt yields during the first month of 2024, with long term inflation remaining flat.
Its index fell by 3.9 per cent during January to £158,000.
Despite this fall XPS’s Transfer Activity Index saw a marginal increase over the same month — to an annualised rate of 19 members in every 1,000 transferring their benefits to alternative arrangements.
This incremental change is the fifth consecutive month where transfer activity remained at a very low level.
XPS also monitors the number of pension transfers that are flagged a potential scame. In total 84 per cent of cases reviewed by its Scam Protection Service in January raised at least one scam warning flag.
This represents a decrease of 6 per cent compared to December 2023, and is only the third time the index has decreased to below 90 per cent in the past year.
It says this could be a result of an increased number of annuities being purchased by members due to current market conditions resulting in favourable pricing. Such transfers are lower risk as no investment decisions are made upon purchase of an annuity, so fewer scam warnings flags are raised.
