The proportion of members transferring their pension increased to an annualised rate of 41 members per 100,000 in July 2022, a 41 per cent month-on-month rise, XPS Pensions Group has revealed.

According to the firm’s Transfer Activity Index, this is the highest rate since January 2022, but it remained “far below” the volume of transfer activity of recent years.

Meanwhile, XPS’s Scam Flag Index showed that 94 per cent of transfer cases reviewed by the XPS Scam Protection Service showed at least one scam warning sign.

This represents a slight fall from the 97 per cent recorded in June, but marks the second month in a row where the rate has been more than 9 in 10 cases.

The overseas investment amber flag remained as the most common scam warning identified.

Following six months of decline, XPS’s Transfer Value Index was up marginally at the end of July at £210,000, an increase of £17,000 from June, with the rise attributed to a small fall in gilt yields.

Although this was the first increase in 2022, the XPS Transfer Value Index remained 22 per cent below the record high of £270,000 seen in December 2021.

“Many pension scheme members will be finding that their household finances are under pressure due to the ongoing cost-of-living crisis,” commented XPS Pensions Group head of member options, Mark Barlow.

“Although this is only one month, we have seen a rise in the number of members transferring, possibly to meet their increased income needs.

“Whilst pension transfers can play a valuable role, it is crucial that members have appropriate support, including access to unbiased advice, to ensure that they make the right decision for them.”

XPS Pensions Group client lead, member engagement hub, Helen Cavanagh, added: “Despite the small fall in scam warning flags last month, we have now entered a period where almost all transfer requests lead to MoneyHelper referrals.

“Whilst many will ultimately be legitimate transfers, we are always wary that new more sophisticated scam practices will continue to evolve.

“We welcome The Pension Regulator’s recent announcement of its plan to further help educate members and trustees about scams, to renew its effort to co-ordinate scam-fighting intelligence and to bring offenders to justice.”

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