Almost two in three (65 per cent) potential pension transfers raised at least one scam warning flag in February, according to XPS Pensions Group’s Scam Flag Index, the highest proportion in the past 12 months.

February saw an increase in the amount of scam warnings, with 50 per cent of potential transfers raising scam flags in January compared to 65 per cent of those in February.

XPS Pensions Group reported a decrease in transfer activity over the month, with 40 members out of every 10,000 transferring their pensions compared to 47 in January.

This fall represents the fourth consecutive month of decreased activity starting in November 2021, when 59 members out of 10,000 transferred their pensions.

XPS Pensions Group also reported a fall in the Transfer Value Index for the third consecutive month, registering a month-end average of £249,000, down 8 per cent from its peak in November 2021.

The consultancy noted that gilt yields continued to tick up during February, leading to a decrease in transfer values despite the rise in inflation expectations.

XPS Pensions Group client lead member engagement hub, Helen Cavanagh, commented: “The new flags introduced last year by the Department of Work and Pension’s updated transfer regulations have driven a spike in transfer cases showing warning signs of pension scams.

“We expect this trend to continue over the coming weeks and months, which will put increased pressure on the government’s MoneyHelper service to provide guidance to all these members.”

XPS Pensions Group head of member options, Mark Barlow, added: “Whilst the recent slump in transfer activity shows no sign of abating, our indicative transfer value index has also recently been in decline.

“We expect that in the shorter term, markets are likely to endure another period of volatility given the current global conflict, which could also lead to an increased risk of wider scam activity.”

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