Pension scam warning ‘flags’ are at highest level in nine months according to new data from XPS Group.
In total more than nine out of 10 pension transfer cases (92 per cent) reviewed by the XPS Scam Protection Service in June this year raised at least one scam warning flag.
According to the XPS Scam Flag Index this is the highest level since September last year, and marks a significant increase from the previous month.
This index has remained relatively stable over the past quarter, with June 2024 being the first month this year to exceed 90 per cent of cases reviewed raising at least one scam warning flag.
XPS also reported a marginal decrease in transfer activity over the month. XPS’s Transfer Activity Index showed that an annualised rate of 15 members in every 1,000 transferred their benefits to alternative arrangements in June.
This is the seventh consecutive month the index has remained below 20 members per 1,000, compared to just a single occurrence in the prior year. The second quarter of 2024 has seen the lowest volume of transfers since the index was first published.
XPS’s Transfer Value Index held steady in June 2024 at £156,000, marking the sixth consecutive month that the index has been at or below £160,000.
The index has shown remarkable stability this year, with the largest change in the last six months being a decrease of 3.4 per cent from March to April. The second quarter of 2024 has been the most stable in three years, driven by lower volatility in gilt yields and long term inflationary expectations.
XPS Group senior consultant Helen Cavanagh says: “We have seen yet another quarter of the Transfer Value Index remaining stable, although average transfer values are about 5 per cent lower when compared with the same period last year. This decline in transfer values may be contributing to the historically low transfer volumes, with the Transfer Activity Index being lower than ever before over 2024.
“With the new Government in place, we hope to see increased engagement from them on the transfer regulation changes that were discussed with the industry prior to the General Election, which could potentially lead to falls in the Scam Flag Index in future.”
