Average pension transfer value hits 6-year low; scam warnings hit record high

May’s month-end average pension transfer value was £217,000, down from £232,000 in April and the lowest since June 2016, XPS Pensions Group’s Transfer Value Index has indicated.

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

More than four in five (83 per cent) of the transfers reviewed raised one or more scam warning flags, according to the Scam Flag Index, the highest rate observed in the tracker’s history and an increase of roughly 30 per cent since the beginning of 2022.

It was also revealed that, after a six-month period of decline, the rate of members completing transfers rebounded slightly to an annualised rate of 37 members per 100,000, an increase on the 35 members per 100,000 recorded at the end of April.

XPS Pensions Group member engagement hub client lead, Helen Cavanaugh, commented: “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.”

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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