Defined benefit transfer values increased to another record high during July, according to a new report.

XPS Pensions Group’s Transfer Value Index rose from £259,700 at the end of June to a record high of £261,500 on 30^th July. The pension consultancy said the increase was the result of a fall in gilt yields during the month.

The group’s Transfer Activity Index fell slightly in July in comparison to June. However, the number of completed transfers remained close to the levels seen prior to the Coronavirus pandemic. In July transfer activity was at an annual equivalent of 0.94% of eligible members, down from 1.05% in June.

With some Financial Planners exiting the DB transfer advice market, XPS expressed concerns about the reduction of capacity within the advice market at a time when there is a greater need for advice for members.

Mark Barlow, partner at XPS Pensions Group, said: “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.

“As we expected, a number of financial advisors are leaving the DB transfer advice market following the ban on contingent charging. This will make it harder for members to get crucial advice, leaving them vulnerable to poor decisions or, at worst, pension scams. A recent XPS poll of more than 150 scheme representatives found that over 85% 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.”