Defined benefit (DB) transfer activity fell to a record low in September, whilst transfers flagged as at risk of scam activity hit a new high of 62 per cent, according to the XPS Transfer Watch.

The group’s Transfer Activity Index fell from an annual equivalent of 0.67 per cent of eligible members in August to just 0.54 per cent in September, "marginally lower" than the 0.58 per cent rate recorded in April, following the onset of the UK lockdown.

XPS Pensions Group partner, Mark Barlow, explained that the record low recorded during October may be a result of the difficulties members face in finding a suitable advisor following the withdrawal of "many firms" from the market.

"Many advisers withdrew from the market in part due to the ban introduced on contingent charging," he explained.

The XPS Red Flag Index meanwhile, has risen by 11 percentage points over the past month, with almost two-thirds (62 per cent) of transfers covered by XPS scam protection service in September being flagged as at risk of a scam, compared to 51 per cent in August.

The Transfer Value Index has also recorded a “small increase” from £253,200 at the end of August to £255,800 at the end of September, which was attributed to a fall in gilt yields.

XPS Pensions Group consultant, Helen Cavanagh, described the increase as a "worrying new high" for the index.

She stated: "This is a continuation of the rise seen since the start of lockdown and, within these figures, we see a significant number of members not fully understanding the fees they are paying.”

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