DB pension transfer activity increased for the third month in a row in June according to the XPS Transfer Watch Index.
This index gives an annualised rate that shows that for every 10,000 DB members around 75 are transferring out of these pensions. This is the highest level since July last year.
XPS says its scams red flag index fell in June, but still remains at a very high level. It says more than half (55 per cent) of transfer show at least one warning sign of a potential scam or the potential for poor member outcomes.
There was a very small fall in the Transfer Value Index, reflecting a continued period of stability in the financial markets.
XPS Pension Group’s Transfer Watch monitors how market developments have affected transfer values for a typical pension scheme member and monitors the number of members choosing to transfer out of DB schemes.
It points out that despite the high number of transfers with scam ‘red flags’ the Government has to date rejected the Work and Pension Committee’s recommendation that the Online Safety Bill should do more to tackle online advertising of fraudulent pension products.
XPS Pensions Group head of member options Mark Barlow says: “We have seen fewer transfers and retirements over the past twelve months, so it’s no surprise that we’re now seeing an increase in activity as lockdown restrictions are eased.
“Whilst scam warning signs remain so high, and with no immediate prospect of laws combatting fraudulent online pensions adverts being strengthened, it’s as important as ever that trustees and employers take steps to support and protect their members.”
