The number of scam warnings on defined benefit transfers is at an all-time high, despite a downward trend in transfer activity, XPS Pensions said.
The XPS Scam Flag Index identified that in June, 97 per cent of transfer cases reviewed were assessed as having one or more scam warning signs, up from 83 per cent in May.
The rise was primarily driven by the overseas investment amber flag required by the new transfer regulations, which was raised in 85 per cent of cases assessed.
If this particular flag were to be removed, then the number of cases where scam warning flags were identified falls to 62 per cent.
XPS Pensions Group client lead, member engagement hub Helen Cavanagh, said: “The full effects of the new transfer regulations are now clear. While we support the aim of the regulations to stop pension scams, the prevalence of the overseas investment flag is causing unnecessary delays for some members.
“While the government and the Pensions Regulator have recognised concerns from the industry regarding the wording of the regulations, we expect this pattern to persist unless they are revised.”
Source: XPS Scam Flag Index
Transfer values also continued their sharp fall during June and XPS said increases in long-term gilt yields contributed to a month-end average of £203,000, the lowest value seen since November 2014.
In May, the group’s Transfer Value Index identified that the month-end average transfer value was £217,000, the lowest since June 2016.
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