XPS Pension Group has found that over eight-in-10 pension transfers reviewed in May raised one or more red flags.
According to its scam flag index, May’s 83% rate is the highest observed in the tracker’s history and has increased from 50% in January 2020.
Rates have now risen for the past five consecutive months.
XPS’ Transfer Value Index found that May’s month-end average transfer value was £217,000 ($266,609, €251,833), the lowest since June 2016.
It fell 7% over May and this 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 in the XPS Transfer Activity Index rebounded slightly to an annualised rate of 37 members per 100,000.
Helen Cavanagh, client lead of member engagement hub at XPS Pensions Group, 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.”
Mark Barlow, head of member options at XPS Pensions Group, 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.”