However, the number of transfers still remain below the volumes seen in recent years, according to the XPS Pension Group’s Transfer Activity Index.

The number of scam flags being raised by pension transfers continued at their recent high levels.

XPS’s Scam Flag Index showed that 94% of transfer cases had one of more scam warning signs, the second month in succession where the rate was in excess of nine in ten cases. The overseas investment amber flag remained the most common warning identified.

Transfer values rose slightly at the end of July to an average of £210,000, ending a six-month period of decline. XPS said the increase was due to a small fall in gilt yields over the month.

Despite being the first increase in 2022, the XPS Transfer Value index remained 22% below the record high seen in December 2021.

Mark Barlow, head of member options at XPS Pensions Group, said: “Many pension scheme members will be finding that their household finances are under pressure due to the ongoing cost-of-living crisis. Although this is only one month, we have seen a rise in the number of members transferring, possibly to meet their increased income needs. Whilst pension transfers can play a valuable role, it is crucial that members have appropriate support, including access to unbiased advice, to ensure that they make the right decision for them.”

The XPS Transfer Watch monitors how market developments affect transfer values for an example member, as well as how many members are choosing to take a transfer value. 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 represents 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.