Defined benefit transfer activity fell to a record low in February, as pension savers grow “increasingly cautious” about retirement arrangements, says XPS Group.
The consultancy’s Transfer Activity Index showed there was an annualised rate of 13 members in every 1,000 transferring their benefits to alternative arrangements.
It was the third consecutive month the Index has fallen and takes transfer levels to the lowest rate recorded since the Index was established in 2018.
Meanwhile, XPS Group’s Transfer Value Index remained relatively stable over February 2025, ending the month only slightly lower than at the end of January, at £146,000. The firm said this was in line with the previous lowest month-end value recorded in December 2024 and was in part driven by a slight decrease in long-term inflation expectations.
Separately, XPS Group said the number of pension cases receiving a scam warning hit its highest level in over half a year. More than nine in 10 (92%) cases reviewed by the XPS Scam Protection Service in February raised at least one scam warning flag, the highest level seen since June 2024 and an increase of 4% compared to the previous month.
Helen Cavanagh, senior consultant at XPS Group, said: “The continued decline in transfer activity highlights a notable shift in member behaviour and could point towards a new norm within the transfer landscape. Although we have observed a jump in the Scam Flag Index this month, the average Index over the past 12 months is lower than the peak we observed in mid-2022 following the introduction of the transfer regulations in late 2021.”
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