Despite higher values, transfer activity remained relatively steady although the activity trend has been downwards over the past three years, likely influenced by greater regulatory scrutiny of pension transfers and many advisers pulling out of the market.

The index is based on statistics from XPS’s internal data covering occupational pension clients.

The separate Red Flag Index, which warns about the risk of potential pension scams on transfers, rose to 50% in November, meaning half of prospective transfers showed one or more warning signs of a potential scam or likelihood of poor member outcomes.

The signs of potential scams are identified and monitored by XPS’ Scam Protection Service.

XPS Pension Group’s Transfer Watch monitors how market developments have affected transfer values for a typical pension scheme member. It also monitors how many members are choosing to take a transfer from their DB pension scheme.

New transfer regulations came into force on 30 November and enable trustees to remove a member’s statutory right to proceed if any red flags are raised in relation to a transfer. The new rules also introduce amber flag ratings. If these are identified they require a member to have a scam guidance appointment from the Money and Pensions Service (MAPS) before the transfer can proceed.

Mark Barlow, partner, XPS Pensions Group, said: “Increasing inflation expectations are continuing to drive ever-higher transfer values. However, this doesn’t seem to be translating into increased activity, which has remained consistently lower than pre-pandemic levels perhaps due to difficulties in obtaining suitable financial advice or individuals steering clear of making significant financial decisions in the current environment.”

The 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.