Pensions - Articles - XPS reveal an increase in pension scam warnings

 The Transfer Value Index fell again in January to a month-end average of £253,000, 2% lower than at the end of December. The fall was largely due to a continued increase in gilt yields over the course of January and came despite the rises in inflation expectations.

 The proportion of transfers showing red flags for a potential scam or for poor member outcomes rose to 50% after a dip in December. The most prevalent warning flag identified was a lack of member understanding regarding fees that would be paid in the receiving scheme.

 Mark Barlow, Head of Member Options, XPS Pensions Group commented: “Transfer activity remains at historically low levels, a sign that members continue to struggle to find suitable financial advice. It’s imperative that schemes do all they can to help members access quality advice before they make any decisions about what to do with their pension pots.”

 Helen Cavanagh, Client Lead, Member Engagement Hub, XPS Pensions Group added: “January’s data shows an unwelcome increase in warning flags on transfers. A lack of member understanding of fees remains the most common flag, which will require members to take scams guidance before transferring under the new transfer regulations.”

 Charts 1 and 2 - XPS Transfer Value Index and XPS Transfer Activity Index
 

 Chart 3 – XPS Scam Flag Index