The number of potential pension scam warning flags continued to rise in April, according to XPS Pension Group.
The firm’s Scam Flag Index Tracker showed a record high 78% of transfers reviewed raised at least one warning sign of potential scam activity, marking the fourth month of consecutive increases.
XPS Pensions Group said the recent fall in the transfer value index also continued to gather pace last month, with the month-end value of £232,000 representing a 5% drop compared to the end of March as a rise in gilt yields took effect.
A similar pattern was seen in the XPS Transfer Activity Index, which showed the number of members completing transfers fell to an annualised rate of 35 members out of every 10,000, down from 38 in March.
Helen Cavanagh, client lead, member engagement hub at XPS Pensions Group, said: “Most transfer cases are now being assessed against the flags introduced in the 2021 transfer value regulations, with the overseas investments amber flag triggered in a majority of these cases. Complex or unclear fees, or the member not being aware of the fees they are being charged, are the other most common issues being observed.”
Mark Barlow, head of member options, XPS Pensions Group, added: “With inflation hitting unprecedented levels in recent years, members may be looking to their pension to help cope with the cost-of-living crisis. However, transfer values have fallen by 15% since November due to increasing interest rates, so we advise caution and that members think carefully before accessing their pension in this way. It is crucial that pension schemes take steps now to support their members in making such important decisions.”
XPS Transfer Value Index – to end April 2022
