The Index stood at £175,000 at the end of the month - down 35% compared to the index high of £270,000 in December 2021.

Despite the recent falls, the pension consultant and administrator said transfer values recovered during the month from a low of £148,000 on 10 October as long dated gilt yields hit their peak.

The sister XPS Transfer Activity Index reached its highest rate registered in 2022, showing an annualised rate of 48 members per 100,000 were transferring pensions to another provider during October. The figure suggests the amount of transfer activity remains high.

XPS said the high rate of pension transfer activity may be a sign that some people are beginning to draw down their pension to meet the rising cost of living.

While activity is high so is the risk of scamming. XPS said 96% of cases reviewed by the XPS Scam Protection Service in October raised at least one scam warning flag, according to XPS’s Scam Flag Index.

Although this was slightly down compared to the previous month, the index continues to highlight that almost all cases reviewed raised flags, with overseas investment in the receiving scheme making up the majority. This does not mean a scam was attempted, only that a risk of scamming was seen.

Mark Barlow, head of member options, XPS Pensions Group, said: “Continued market volatility during October resulted in further turbulence for transfer values with the average values at their lowest level since we started the Transfer Value Index.

“Despite these falls in values, we are seeing an increase in members transferring during the month. Such an increase in transfers may be an initial sign that people are looking to draw their pension more flexibly to help them respond to the current cost-of-living crisis.”

Helen Cavanagh, client lead, member engagement hub, XPS Pensions Group, added: “We welcomed the announcement that The Pensions Regulator, the Financial Conduct Authority and the Money and Pensions Service have joined forces to highlight the increased risk of scams.

“During this time of economic uncertainty, members may be more vulnerable to being exploited by scammers. With more members looking to transfer their pensions, trustees should remain vigilant to the risk of scams and ensure that they are acting to help prevent suspicious transfers and protect members.”

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, shows the annualised proportion of members that transfer out of pension schemes administered by XPS. If replicated across all private sector, funded, UK, DB schemes this indicates that approximately 50,000 DB members leave their schemes each year.

XPS Pensions Group’s Scam Flag Index tracks the percentage of monthly transfers reviewed by the businesses’ scam protection service that are identified as having warning ‘flags’ which indicate that the member is at risk of being scammed. The flags monitored include both the DWP’s set list of amber and red warnings and further areas of concern identified and monitored by XPS’ Scam Protection Service. The service is provided to the trustees of approximately 350 occupational pension schemes.