Pensions - Articles - Transfer values fall again as scam flags increase

 Long-term inflation expectations have been largely stable over recent months, meaning the continued fall in the index over 2022 is attributable to a gradual uptick in long-term gilt yields, which reached 3.3% per annum at the end of August.

 91% of cases reviewed by the XPS Scam Protection Service in August were deemed to contain at least one scam warning flag, according to XPS’s Scam Flag Index continuing the trend of over 9 in 10 cases reviewed raising flags. Overseas investments in the receiving scheme continues to be the most common flag identified.

 XPS’s Transfer Activity Index recorded an annualised rate of 38 members per 100,000 transferring their benefits over the month. This represented a slight drop in activity from the increase during July but was still the second-highest rate registered since March.

 Mark Barlow, Head of Member Options, XPS Pensions Group, said: “Rising gilt yields have meant that many transfer values on offer are now lower than at any point in the last five years, including during the market shock caused by the emergence of the pandemic. Whilst some pension scheme members may decide whether to transfer based on prevailing market conditions, others may be driven to transfer out of necessity during the current cost of living crisis.”

 Helen Cavanagh, Client Lead, Member Engagement Hub, XPS Pensions Group, added: “We have very much entered a phase of continued high scam warning flag volumes as the full impact of the transfer regulations are being felt. MoneyHelper has, so far, dealt well with managing appointments due to the increased volumes of referrals. However, in our view we would see far fewer referrals if overseas investments in the receiving scheme was not an amber warning flag.”