Average defined benefit (DB) transfer values reached a record high of £261,500 in July, according to XPS Pension Group.
The company’s Transfer Value Index had risen from £259,700 at the end of June to the record high before falling back slightly to end the month at £260,700, with the increase attributed to a fall in gilt yields during the month.
The company’s Transfer Activity Index fell slightly in July compared to the previous month, with transfer activity at an annual equivalent of 0.94 per cent of eligible members in July, down from 1.05 per cent in June.
XPS noted that the number of completed transfers remained around the levels seen prior to the Covid-19 pandemic.
XPS Partner, Mark Barlow, commented: “The continuing rise in transfer values is making them an increasingly tempting option for members.
"However, there are risks associated with transferring, and employers and trustees have a vital role in ensuring members have sufficient support available when considering such important decisions.”
The company pointed out that the upcoming Financial Conduct Authority ban on contingent charging meant that some firms had opted to exit the DB transfer advice market, adding that there were industry concerns “about the reduction of capacity within the advice market at a time when there is an ever-greater focus on providing members with appropriate support”.
Barlow said: “A recent XPS poll of more than 150 scheme representatives found that over 85 per cent of employers and trustees agreed that pension schemes should help members to obtain financial advice. In the last year we have worked with schemes to make high quality financial advice available to 18,000 more pension scheme members.”
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