The number of pension transfers that indicated signs of a scam has grown significantly, reaching similar levels recorded in December 2020, according to XPS Pension Group.
According to the XPS Pension Group’s Scam Flag Index, 70 per cent of transfer requests made across the month exhibited indicators of a scam. This is the third month in a row that the number of scam warning flags has increased, up from two out of every three inquiries in February. It is the highest rate of scam flags since December 2020, when 76 per cent of requested transfers showed evidence of fraud.
In March, the recent declining trend in transfer activity continued, with a new low number of members transferring. The XPS Transfer Activity Index declined to 38 members out of every 10,000 members moving their pensions over the month, down from 40 the previous month.
The Transfer Value Index has also dropped again, with the month-end average of £245,000, down 2 per cent from February and down 9 per cent from the peak in November 2021. Despite an uptick in inflation forecasts in March, a sustained rise in gilt yields resulted in a drop in overall transfer values.
XPS client lead Helen Cavanagh says: “We are continuing to see that the updated transfer regulations are having a significant impact on the volume of scam warning flags that are being observed. Whilst the volumes of transfers that are being stopped from proceeding under the regulations are low, many of the flags seen require the member to seek additional scams guidance from MoneyHelper, so there will continue to be pressure on the service to provide guidance to all these members in a timely manner.”
XPS head of member options Mark Barlow says: “Members tend to be more cautious in times of economic uncertainty, so it is not surprising that transfer activity continues to fall. We are concerned that although transfer activity has fallen recently, the current cost of living crisis could lead to members looking to access their benefits, leaving them vulnerable to poor outcomes or, at worst, a scam.”
