'Red Flag' warnings on record 64% of pension transfers

The XPS Pensions’ Transfer Watch monitoring service has flagged up 64% of recent pension transfers as showing signs of a potential scam, a record number. The service reports, through its ‘Red Flag Index’, the incidence of scam ‘red flags’ or scam risk factors identified at the point of transfer. The Transfer Watch also records how many members in XPS administered schemes are choosing to take a transfer from their DB pension and also monitors transfer values for a typical pension scheme member. According to XPS, November saw a record high in the Red Flag Index, with 64% of transfers showing at least one warning sign of a potential scam, meaning the transferee was at risk of losing money. The Red Flag Index began the year at 31% of transfers being flagged up as at risk and has risen steadily during the year, topping 50% in August. The warning does not mean that a pension transfer scam has occurred but it does flag up signs that a scam may be under way and further checks are required. Mark Barlow, partner, XPS Pensions Group, said he was concerned abut the high number of ‘red flag’ cases. He said: “It is concerning that we continue to see such high volumes of cases raising red flags of pension scams. “The recent Lloyds Bank case will result in pension schemes making one-off payments to many former members, presenting a further opportunity for scammers. It is vital that trustees and sponsors do all they can to protect their members, including signing up for the Pensions Regulator’s pledge to combat pension scams.” He said November was a turbulent month for transfer values due to England’s second national lockdown, the US election and Brexit remaining in the headlines. The XPS 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. It was £256,000 in November, down £1,000 on October. Transfer activity was 0.63% of the total, a slight increase on October. • XPS is running a webinar on Tuesday 15 December on steps schemes can take to protect members. The panel will include Stephen Timms MP, Margaret Snowdon OBE and Martin Broomfield, TPR’s head of intelligence. Details and registration here: XPS Live | Let’s Stand up for Members and Stamp out Pension Scams

'Red Flag' warnings on record 64% of pension transfers

Related items

News from Twitter