XPS Pension Group’s transfer activity index has shown that the volume of defined benefit (DB) pension transfers have fallen to its lowest since September 2022.
According to XPS’s data, an annualised rate of 38 out of every 10,000 pension scheme members transferred their DB pension in March 2023. This number is down from annualised rates of 42 in February 2023 and 39 in January 2023.
While there have been some notable spikes in pension transfer activity, transfers have generally been falling steadily since 2017, when annualised rates demonstrated 200 out of every 10,000 DB pension holders were transferring out.
Although the volume of pension transfers against February’s activity fell, the value of transfers in March rose 4%, giving an average transfer value of £175,000. FTAdviser reported that this increase was primarily driven by a slight fall in gilt yields.
Despite this increase, average pension transfer values remain way below their 2021 peak of £270,000. Average values fell as various issues drove worldwide inflation increases throughout 2022.
Significant numbers of transfers flagging warning signs
In addition to these numbers, XPS’s red flag index found that 90% of proposed pension transfers in March showed at least one warning sign of potentially being a pension scam or that it would deliver poor member outcomes. Despite being a very high figure, it is slightly less than the numbers for February 2023 (92%) and January 2023 (93%).
Since November 2021, pension trustees have been able to pause or block pension transfers if they feel the member is at risk by raising a “red flag.” Trustees can also raise an “amber flag” if they believe the transfer may be a pension scam. Where a scam warning is raised, the individual wishing to transfer must demonstrate they have received specific scam guidance from the Money and Pensions Service before the transfer will be allowed to happen.
Get your money back if you’ve fallen victim to a pension scam
If you’ve fallen victim to a pension scam, LawPlus Solicitors may be able to help you get at least some of your savings back.
Contact us now for a free, no-obligation review of your pension transfer, advice or product, and take the first step to getting the compensation you deserve.