The rise represents the third consecutive monthly increase in the prevalence of scam warning flags, which are up from two out of every three requests in February. It is the highest rate of scam flags since December 2020, when 76% of requested transfers showed scam flags.
A recent downward trend in transfer activity also continued in March, with yet another record low number of members transferring. The XPS Transfer Activity Index fell to an annualised rate of 38 members out of every 10,000 transferring their pensions across the month, down from 40 the previous month.
There has also been another fall in the Transfer Value Index, 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 expectations increased over March, a continued rise in gilts yields resulted in an overall fall in transfer values.
Helen Cavanagh, Client Lead, Member Engagement Hub, 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 be pressure on the service to provide guidance to all these members in a timely manner.”
Mark Barlow, Head of Member Options, 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.”
Charts 1 and 2 - XPS Transfer Value Index and XPS Transfer Activity Index
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