Pension scam warnings soared to 70 per cent in March, new data from XPS Pensions Group found.
The rise marks the third consecutive monthly increase in scam warning flags, up from two out of every three pension transfer requests in February. It is also the highest rate of scam flags since December 2020, when 76% of requested transfers raised red flags.
The higher figures come despite a drop in transfer activity in March, with just 38 members out of every 10,000 transferring their pensions across the month, down from 40 the previous month.
XPS said there had also been a fall in transfer values, with the month-end average being £245,000 – a fall of 2% compared to February and 9% lower than the peak in November 2021.
Although inflation rose during March, a continued rise in gilt yields resulted in overall transfer values dropping, the pensions consultancy said.
Helen Cavanagh, client lead, member engagement hub at XPS Pensions Group, said: “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.”
Mark Barlow, head of member options at XPS Pensions Group, added: “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.”
Transfer Watch over the past 12 months