Pension transfer activity and values made a stable start to 2023, according to XPS data, but the pension consulting and administration business says provides are bracing for an influx of transfer requests as the cost of living continues to bite.
XPS Pension Group’s Transfer Value Index rose by around 2% over the first month of 2023, ending January at £171,000. The slight increase was primarily led by a small fall in gilt yields and a slight rise in long term inflationary expectations during January, which are key assumptions in determining the value of a defined benefit pension transfer value.
XPS’s Transfer Activity Index fell slightly during January, showing an annualised rate of 39 members per 100,000 transferring out of the current scheme to an alternative arrangement. This rate is consistent with the Index over most of 2022, aside from the large spike in activity in November.
93% of cases reviewed by the XPS Scam Protection Service in January raised at least one scam warning flag, according to XPS’s Scam Flag Index. This is the third consecutive month the Index has remained at this level and the eighth month in a row where it’s been above 90%.
Mark Barlow, head of Member Options, XPS Pensions Group, said: “Following the significant fall in transfer values over the past year, it’s perhaps unsurprising we are seeing more stability and fewer people transferring their pension.
“However, many schemes are continuing to brace for an influx of members wanting to transfer their pension to address the cost-of-living crisis and are implementing additional support and protection to ensure members make the right decision for their circumstances.”
