Defined benefit (DB) transfer values increased by nearly 4% during May and the number of members taking a transfer value rose slightly from the record low observed in April.

The XPS Pensions Group’s Transfer Value Index increased steadily throughout May, finishing the month at £258,600 in comparison to £249,300 at the end of April.

The index is now only marginally lower than the record value of £260,422 seen in September 2019.

The pensions consultancy’s Transfer Activity Index rebounded from the record low of 0.58% set in April, with the number of completed transfers increasing to the equivalent of 0.65% of eligible members.

This is equivalent to just over 6 in every 1,000 eligible members transferring each year.

Mark Barlow, partner at the XPS Pensions Group, said: “Transfer values rose during May as we saw long-term inflation expectations return to pre-lockdown levels. We also saw a small uptick in transfer activity during May which may be a result of those schemes who initially paused transfers restarting quotations. At XPS, around 25% of schemes we work with paused transfers initially but our most recent survey in mid-May showed only 6% continue to suspend quotations.

XPS Transfer Watch monitors how market developments have affected transfer values for an example member, as well as how many members are choosing to take a transfer value.

XPS Pensions Group’s Transfer Value Index shows the estimated Cash Transfer Value of a 64-year-old member with a pension of £10,000 a year with typical inflation increases. The value changes over time with market movements. Mortality assumptions are reviewed periodically.

XPS Pensions Group’s Transfer Activity Index, represents the annualised proportion of members that transfer out of pension schemes administered by XPS.