XPS Group Index shows Pension scam warning ‘flags’ at highest level in nine months
XPS Group Index shows Pension scam warning ‘flags’ at highest level in nine months
30 Jul 2024
92% of cases reviewed by the XPS Scam Protection Service in June 2024 raised at least one scam warning flag, according to the latest XPS Scam Flag Index. This is the highest level since September 2023 and marks a significant increase from the prior month. The Index remained relatively stable over the past quarter, with June 2024 being the first month this year to exceed 90% of cases reviewed raising at least one scam warning flag.
XPS’s Transfer Activity Index saw a marginal decrease over June 2024, to an annualised rate of 15 members in every 1,000 transferring their benefits to alternative arrangements. This is the seventh consecutive month the Index has remained below 20 members per 1,000, compared to just a single occurrence in the prior year. The second quarter of 2024 has seen the lowest volume of transfers since the Index was first published.
XPS’s Transfer Value Index held steady in June 2024 at £156,000, marking the sixth consecutive month that the index has been at or below £160,000. The Index has shown remarkable stability this year, with the largest change in the last six months being a decrease of 3.4% from March to April. The second quarter of 2024 has been the most stable in three years, driven by lower volatility in gilt yields and long term inflationary expectations.
Helen Cavanagh, Senior Consultant, XPS Group, said: "We have seen yet another quarter of the Transfer Value Index remaining stable, although average transfer values are about 5% lower when compared with the same period last year. This decline in transfer values may be contributing to the historically low transfer volumes, with the Transfer Activity Index being lower than ever before over 2024. With the new Government in place, we hope to see increased engagement from them on the transfer regulation changes that were discussed with the industry prior to the General Election, which could potentially lead to falls in the Scam Flag Index in future.”
Chart 1 - XPS Transfer Value Index
Chart 2 - XPS Transfer Activity Index
Chart 3 – XPS Scam Flag Index
Table 1 – Transfer Watch over the past 12 months
Source: XPS Group – All data is at the end of each month.
Notes:
XPS Transfer Watch is part of XPSArena, a free to access destination for learning support and development for people in pensions. Users will be able to scrutinise the latest data contributing to the headline Scam Flag Index, with filters available to compare warning flag prevalence over time and by several demographic groupings.
XPS Transfer Watch monitors how market developments have affected transfer values for an example member, as well as how many members are choosing to take a transfer value.
XPS Group’s Transfer Value Index shows the estimated Cash Transfer Value of a 64-year-old member with a pension of £10,000 a year with typical inflation increases. The value changes over time with market movements. Mortality assumptions are reviewed periodically.
XPS Group’s Transfer Activity Index represent the annualised proportion of members that transfer out of pension schemes administered by XPS. If replicated across all private sector, funded, UK, DB schemes this indicates that approximately 10,000 DB members leave their schemes each year
XPS Group’s Scam Flag Index tracks the percentage of monthly transfers reviewed by the businesses’ scam protection service that are identified as having warning ‘flags’ which indicate that the member is at risk of being scammed. The flags monitored include both the DWP’s set list of amber and red warnings and further areas of concern identified and monitored by XPS’ Scam Protection Service. The service is provided to the Trustees of approximately 500 occupational pension schemes.