DB transfer values have fallen to their lowest level for a year, according to data from XPS Group.
The group transfer value index fell by almost 2 per cent during October this year, with the month-end position reaching £153,000. This continues the trend of two consecutive month-on-month decreases in this index, and put transfer values at their second lowest month-end value since the index was first published in 2018.
The primary driver for falling transfer values is the recent increase in gilt yields, due in part to investor uncertainty following the increased borrowing in the recent Budget. However XPS Group says this has been “slightly offset” by the small increase in long-term inflation expectations.
Meanwhile XPS Group’s transfer activity index increased slightly over October, reaching an annualised rate of 18 members in every 1,000 transferring their benefits to alternative arrangements. However, the level of transfer activity continues to be low.
According to the group’s scam flag index, this continues to be an issue, with 86 per cent of cases reviewed by the XPS Scam Protection Service last month raising at least one scam warning flag. However this is a marginal hl decrease of 1 per cent, when compared to the previous month.
XPS Group senior consultant Helen Cavanagh says: ”The Transfer Value Index has reached its lowest point since October 2023, which is also the second lowest month-end position since the Index was first published. In contrast, Transfer Activity saw a slight uptick, which may suggest that the volume of transfers is less sensitive to the actual sizes of the transfers compared to other factors.”