The latest monthly update from XPS Pensions Group’s Transfer Value Index shows that average pension transfer values fell to a six-year low of £217,000 in May, a £15,000, or 7%, drop from April’s £232,000 figure.
XPS Pensions Group attributed the drop to another increase in gilt yields and a fall in the long-term inflation outlook, despite the current high inflation rates being seen in the United Kingdom.
In addition to the drop in the average pension transfer value, a record 83% of pension transferred reviewed in May raised at least one scam warning flag, according to XPS’s Scam Flag Index. This is the highest rate observed to date and represents an increase of around 30% in scam transfer warnings since the start of the year.
Also on the increase in May was the pension transfer completion rate, which had been steadily declining over the previous six months. This figure rose to an annualised rate of 37 per every 100,000 pension scheme members completing transfers in May, up slightly from 35 per every 100,000 in April.
Discussing May’s numbers, Helen Cavanaugh, XPS Pensions Group’s member engagement hub client lead, 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, XPS Pensions Group’s head of member options, 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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