The proportion of pension transfers raising at least one scam warning flag remained at 97 per cent in June 2026, as transfer activity reached its highest level in a year, according to XPS Group.

The consultancy’s latest Scam Flag Index found that 97 per cent of cases reviewed by the XPS Scam Protection Service during June contained at least one warning flag, down slightly from 98 per cent in May.

XPS said the persistently high figure demonstrated that the threat from pension scams remained significant, despite proposed reforms intended to improve the pension transfer process.

It urged members to remain vigilant and trustees to maintain robust scam protection procedures while the Department for Work and Pensions (DWP) consults on changes to the pension transfer regulations.

The consultation includes targeted reforms relating to transfers into small self-administered schemes (SSASs), alongside changes intended to address practical issues identified in the government’s 2023 review of the regulations.

XPS Group senior consultant, Helen Cavanagh, welcomed the proposed removal of the overseas investment warning flag, arguing that it could reduce delays affecting otherwise low-risk transfers.

However, she warned that the proposed expansion of the regulations’ 'First Condition' could reduce the scrutiny applied to a substantial proportion of transfer requests.

“The DWP’s consultation on changes to the pension transfer regulations proposes targeted changes in relation to transfers to small self-administered schemes, whilst also addressing practical issues identified in the 2023 review," she said.

“This is welcome news, as the proposed removal of the overseas investment flag should help to speed up otherwise low-risk transfers.

“However, the potential widening of the First Condition should be considered with caution, as this could mean that over 75 per cent of transfers that are currently receiving enhanced due diligence could be processed automatically without further scrutiny.”

Cavanagh added that improving members’ transfer experiences should not come at the expense of effective scam checks.

“Whilst the proposed changes may improve the member experience for those choosing to transfer their benefits, careful assessment of transfer requests remains as important as ever," she added.

Meanwhile, XPS’s Transfer Activity Index remained above 0.2 per cent throughout the second quarter of 2026.

Transfer activity peaked in June at an annualised rate of 24 transfers per 1,000 scheme members, its highest level since June 2025.

XPS suggested the sustained increase could indicate that pension transfers were beginning to regain popularity, despite gilt yields remaining high.

Indeed, its Transfer Value Index fell to £138,000 at the end of June, the lowest level recorded so far in 2026.

XPS noted that the disruption across global energy markets and uncertainty over future oil prices had increased long-term inflation expectations and gilt yields.

These competing pressures kept transfer values broadly stable over the second quarter, despite the monthly decline recorded in June.

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