The increase was driven largely by a reduction in gilt yields and marks the end of a period of relative stability for transfer values, according to XPS.

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.

However, DB pension transfer activity dipped slightly over the month. The Transfer Activity Index showed that an annualised rate of 64 members out of every 10,000 transferred their pension.

The Scams Red Flag Index in July remained at a similarly high level to last month, with 54% of transfers showing at least one warning sign of a potential scam or poor member outcomes.

Mark Barlow, partner at XPS Pensions Group, said: “With transfer values back to record highs, 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.”

Helen Cavanagh, client lead, member engagement hub at XPS Pensions Group, 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% 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.”