DB pension transfer activity increases marginally

27 June 2024

The rate at which people are transferring out of their DB pensions increased slightly last month after last months’ new record low, while the value of a typical transfer remained stable having fallen to its lowest point in six months in April, according to the latest analysis from XPS Pensions Group.

XPS’s Transfer Activity Index saw a slight increase in May 2024, reaching an annualised rate of 19 members in every 1,000 transferring their benefits to alternative arrangements, up from 14 members in every 1,000 in April. Despite this, the Index remained below 20 members in every 1,000 for the sixth consecutive month reflecting the continued long-term trend of low transfer volumes.

Meanwhile, XPS’s Transfer Value Index increased slightly during May 2024 from £155,000 to £156,000 after a decline of 3.4% during April. This marks a continued period of stability for the Index, with month-end values fluctuating within a £5,000 range since the start of the year. This stability reflects the small increases in gilts yields, coupled with similar increases in long term inflation, resulting in lower volatility in transfer values.

Helen Cavanagh, Senior Consultant, XPS Pensions Group, said: “We continue to see a long-term trend of low transfer volumes, alongside relatively stable transfer values, throughout 2024. Among those transferring, whilst the majority are still transferring to personal pensions, we continue to see an increasing number are opting to purchase annuity policies, likely due to more competitive pricing driven by higher gilt yields.”

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