Defined benefit (DB) pension transfer values hit a record high of £265,200 on 28 October, before falling back to close the month at £260,000, XPS Pension Group’s Transfer Value Index has revealed.

The new high surpassed the previous record of £264,300, which was recorded on 24 August 2021.

The October increase was driven by continued high future inflation expectations alongside a fall in gilt yields.

XPS’s Transfer Activity Index found that an annualised rate of 56 members per every 10,000 transferred their pension in October, down from the 62 out of every 10,000 that was registered in September.

Its Red Flag Index was recorded at below 50 per cent for the third month in a row, with 47 per cent of transfers showing at least one warning sign of a potential scam or poor member outcomes.

Commenting on the findings, XPS Pensions Group partner, Mark Barlow, said: “Transfer values reached another record high in October, largely due to high inflation expectations and low gilt yields.

“Despite this, transfer activity has yet to recover to pre-pandemic levels, perhaps a result of members finding it more challenging to access financial advice.”

The government recently confirmed new scam regulations that give trustees the power to halt transfer where they suspect potential scam activity will come into force at the end of November, with XPS Pensions Group client lead, member engagement hub, Helen Cavanagh, commenting: “The strengthening of transfer regulations is a major step forward, as it now gives trustees real power in the fight against pension scams.

“However, the new regulations present a major challenge to trustees, who need to act now to ensure that they are able to comply when these changes come into effect at the end of this month.

“It’s also important to remember that satisfying the conditions in the legislation doesn’t mean that a transfer isn’t a scam. We encourage all trustees to continue looking out for other scam warning signs to protect their members and their schemes.”

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