Four in five DB transfer requests raise scam warning

Four in five DB transfer requests raise scam warning

Four in five (83 per cent) defined benefit transfer requests have raised one or more warning flags, according to XPS Pensions Group.

The firm’s scam flag index recorded May to have the highest number of scam warnings in the tracker’s history, up from a near record high in March

This is an increase of roughly 30 per cent since the beginning of 2022.

XPS Pensions Group client lead, member engagement hub, Helen Cavanagh, said: “We continue to see the rate of potential scam activity referrals tick up. 

“The majority of transfers reviewed are now assessed against the new transfer value regulations, with the overseas investments flag registered in three quarters of cases where a flag was present.”

The group’s Transfer Value Index also identified that May’s month-end average transfer value was £217,000, the lowest since June 2016. 

Source: XPS Transfer Activity Index

The fall of 7 per cent over May was due to a further increase in gilt yields and a further fall in long term inflation expectations, despite the continued current high inflation rates.

After a six-month period of decline, the rate of members completing transfers recorded by the XPS Transfer Activity Index rebounded slightly to an annualised rate of 37 members per 100,000.

 Jun 2021Jul 2021Aug 2021Sep 2021Oct 2021Nov 2021Dec 2021Jan 2022Feb 2022Mar 2022Apr 2022May 2022
XPS Transfer Value Index (£000s)248260259251260270258253249245232217
XPS Transfer Activity Index (%)0.750.640.620.620.560.590.500.470.400.380.350.37
XPS Scam Flag Index (%)555447464750415065707883
Source: XPS Transfer Watch over the past 12 months

XPS Pensions Group head of member options Mark Barlow, added: “It is interesting to see a small uptick in members completing a transfer during May, despite the continued slide in transfer values. 

“This could be a response to the cost of living crisis, highlighting the importance of providing support to members to ensure they don’t make an uninformed decision or leave themselves susceptible to scammers.”

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