Pension transfer values fall by over a third during 2022 due to rising gilt yields

by | Jan 29, 2023

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Defined benefit transfer values have fallen precipitously over 2022 as investor concerns over UK debt drove government bond (gilt) yields higher, analysis by XPS Pensions Group has found.

XPS Pension Group’s Transfer Value Index fell by 4% over the month of December, and the tracker shows that transfer values fell a total of 36% over the year as a result of significant rises in gilt yields.

UK gilt yields have risen sharply throughout 2022 reflecting investors’ concerns about the impact of inflation on the country’s economy and the prospect of a widely predicted recession in 2023. Gilt yields are a major factor in determining the value of a defined benefit pension upon transfer.

As transfer values fell, demand for transfers also contracted in 2022. XPS Pension Group’s Transfer Activity Index showed that average transfer activity across 2022 was 44 members per 100,000, down from the 62 per 100,000 across 2021. The numbers for December 2022 were in line with annual averages, following a spike in November.


2022 also saw a significant increase in the number of transfers being flagged as showing potential signs of a scam. 87% of cases in 2022 showed scam ‘warning flags’, up from 52% the preceding year. This was largely down to new legislation introduced in late 2021 which, amongst other things, required that any transfer going into a vehicle with overseas investments raises a scam warning flag. During December 2022, at least one potential scam warning sign was identified in 93% of the cases reviewed.

Mark Barlow, Head of Member Options, XPS Pensions Group, said: “Transfer values have plummeted over the last year, which will be a cause of concern for many members. It makes access to high quality support and advice more important than ever before members make potentially irreversible decisions that could impact their retirement. However, it’s reassuring that, as yet, we have not seen a sustained trend of more members transferring due to cost-of-living pressures.”

Chart 1 – XPS Transfer Value Index


Chart 2 – XPS Transfer Activity Index

Chart 3 – XPS Scam Flag Index

Table 1 – Transfer Watch over the past 12 months

 Dec 212021 AverageJanFebMarAprMayJunJulAugSepOctNovDec2022Average
XPS Transfer Value Index (£000s)270254258253249245217203210197181175179 171212
XPS Transfer Activity Index (%)0.500.620.470.400.380.350.370.290.410.380.380.480.870.440.44
XPS Scam Flag Index (%)415250657078839794919796939387

Source: XPS Pensions Group – All data is at the end of each month.

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