50 members out of every 10,000 transferred their pensions in December, the lowest rate since XPS began tracking this activity in July 2018, according to the XPS Pension Group’s Transfer Activity Index.
The Transfer Value Index fell by 5 per cent (more than £12,000) in December to an average of £258,000, down from a record high of £270,000 at the end of November the previous month. The drop was caused by a rebound in gilt yields in December.
The Scam Flag Index remained below 50 per cent for the fourth month in a row, with 41 per cent of transfers displaying at least one warning sign indicating a potential scam or poor member outcomes. This compares to a high of 76 per cent at this time last year.
XPS Pensions Group head of member options Mark Barlow says: “We often see a slump in transfer activity over the festive period, but this is the lowest rate of transfers we have seen since we started the index in 2018. Although it’s unlikely to be affecting activity significantly yet, it’s interesting that this fall comes immediately after the introduction of the new transfer regulations, which provided trustees with the power to block transfers.
XPS Pensions Group client lead Helen Cavanagh says: “Although the Scam Index remains at a high level, given all the recent focus on preventing pension scams, it’s encouraging to see a fall in the number of transfers displaying warning signs of a pension scam. With the new Government regulations in force placing more requirements on trustees, it’s important that they are able to understand the landscape of how scams might be affecting their members.