Defined benefit (DB) transfer values rose “sharply” over July to end the month at £260,000, according to XPS Pensions Group’s latest Transfer Watch figures, just short of the record high of £261,500 recorded in July 2020.

The increase in transfer values was attributed primarily to a reduction in gilt yields, and marks the end of a period of relative stability for transfer values, which had seen limited movement in recent months amid continued stability in financial markets.

In light of transfer values increasing "back to record highs", XPS Pensions Group partner, Mark Barlow, emphasised that it’s "as important as ever that members are provided with as much support as possible when considering a transfer".

“Encouraging people to seek Pension Wise guidance is a sensible step, but for those deciding to leave their DB pension scheme it is imperative they also have access to high quality unbiased financial advice," he continued.

The index showed that DB transfer activity has also dipped slightly over the past month, with an annualised rate of 64 members out of every 10,000 transferring their pension, compared to 75 out of every 10,000 members in June, which was the highest rate in over a year.

The Scams Red Flag Index, however, has remained at a similarly high level to June, with 54 per cent of transfers showing at least one warning sign of a potential scam or poor member outcomes, compared to 55 per cent in June.

XPS Pensions Group client lead, member engagement hub, Helen Cavanagh, added: “Although the red flag index has stabilised this month, it remains at a concerning level.

“For cases where we identified a warning sign, almost 60 per cent raised concerns relating to fees, including a lack of understanding of the fees that they will be paying in the receiving scheme. This could indicate members are transferring to arrangements that could give poorer retirement outcomes.”

The findings also follow research from Just Group, which suggested that the 'vast majority' of workers are taking a DIY approach to their retirement planning, as just 14 per cent of workers took advice or guidance before retiring.

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