XPS Transfer Watch: transfer activity falls to lowest levels since September 2020 as red flag cases rise to a three-month high

XPS Transfer Watch’s Transfer Activity Index fell to the lowest level since September last year, dropping by almost a quarter to a rate of 55 in every 10,000 members transferring per year. The XPS Red Flag Index identified at least one warning sign of a potential scam or the potential for poor member outcomes in 59% of transfers processed in April, up from 52% in March.

The Transfer Value Index remained largely unchanged over the month as financial markets remained stable.

XPS Pension Group’s Transfer Watch monitors how market developments have affected transfer values for a typical pension scheme member. It also monitors how many members are choosing to take a transfer from their DB pension scheme and, through its Red Flag Index, the incidence of scam red flags identified at the point of transfer.

On the 7th May, the Financial Conduct Authority (FCA) announced its intention to continue scrutinising financial advice on pensions transfers. The FCA has extended its fourth thematic review into the quality of DB transfer advisory firms for at least another year, until Spring 2022. 

Mark Barlow, Partner, XPS Pensions Group commented: “It is disappointing to see an increase in the Red Flag Index after continual falls for the last three months. With warning signs of poor member outcomes remaining so high, we welcome the FCA’s decision to extend their thematic review with the aim of driving up standards of pensions advice. In the meantime, we continue to work with trustees and employers to ensure their members are able to access high quality advice.”