Pensions Industry asked to step up to protect members as scam red flags remain high

Pensions Industry asked to step up to protect members as scam red flags remain high

12 Nov 2020

XPS Pension Group’s Transfer Watch monitors how market developments have affected transfer values for a typical pension scheme member, how many are choosing to take a transfer from their DB pension scheme, as well as how many scam red flags are being identified at the point of transfer.

This month shows continued high proportions of red flags with over 60% of transfers showing signs of possible scams. Transfer values have moved marginally over the month and activity has increased slightly.

November also saw the Pensions Regulator release its pledge, asking the industry to step up to take action to protect members from scams. The pledge sets out TPR’s expectations of the industry and the minimum it thinks should be done to combat scams. Given the number of red flags this is a very welcome development for members.

Mark Barlow, Partner, XPS Pensions Group commented:

“Despite the significant economic uncertainty arising from the Coronavirus pandemic, Brexit and the US election, transfer values remained surprisingly stable during October. We have also seen activity pick up from the record low experienced in September."

Helen Cavanagh, Client Lead, XPS Member Engagement Hub added:

“The launch of the Pensions Regulator’s pledge is a welcome initiative as it empowers trustees to commit to a step change in making members aware of scam risks. Pension scams have been a growing concern for some time, but particularly at the moment as the wider economic and social consequences of COVID-19 make members more vulnerable.”

 

Chart 1 – XPS Transfer Value and Transfer Activity Index

 

Chart 2 – XPS Red Flag Index