Pension transfers “continue to be a target for fraudsters” as 11 per cent of transfers by men showed serious warning signs of a scam in 2021, compared to 6 per cent amongst women, research from XPS Pensions Group has revealed.

Under new legislation from the Department for Work and Pensions, which came into force last November, pension providers will have the power to block transfers that demonstrate a regulatory ‘red flag’ of a scam.

These red flags can include a member receiving advice from an adviser without the correct permissions, a member requesting a transfer after unsolicited contact from a third party or a member feeling pressured to transfer.

Of the cases examined by XPS’s Scam Protection Service across the year, 11 per cent of transfer requests from male pension savers demonstrated a ‘red flag’, compared to 6 per cent for women.

It also revealed that higher transfer values were more likely to show signs of scams, as while the average size of a pension transfer was £211,000 across 2021, the average size of transfer displaying a ‘red flag’ was £279,000.

XPS Pensions Group client lead for member engagement, Helen Cavanaugh, commented: “A lot of the red flags which we see plaguing transfers are relayed to advisors who do not have the correct permissions to provide such advice.

“It’s crucial that members receive quality advice from a properly authorised, experienced advisor if they are to get the best outcomes, and schemes have an important role to play in not only providing access to that advice, but also blocking or pausing transfers that they suspect may be fraudulent.”

XPS Pensions Group partner, Mark Barlow, added: “It’s important that pension schemes do everything in their power to ensure that their members are protected from losing their life savings to scams, particularly in light of the new legislation from government, which requires them to do so.”

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