Pension scam alerts persist as transfers surge
Nearly every pension transfer reviewed in June triggered at least one scam warning, even as activity surged to its highest level in a year.
According to XPS Group, 97% of cases assessed by its Scam Protection Service last month contained at least one red flag. That figure remained almost unchanged from May, when 98% of transfers raised concerns.
Scam risks persist despite proposed reforms
The consultancy said the stubbornly high rate showed that pension scams remained a serious threat, despite ongoing government efforts to tighten transfer rules. The Department for Work and Pensions (DWP) is currently consulting on changes to pension transfer regulations, including targeted reforms for small self-administered schemes (SSASs).
Helen Cavanagh, a senior consultant at XPS Group, welcomed one proposed change—the removal of the overseas investment warning flag. She argued it could reduce unnecessary delays for low-risk transfers. But she cautioned against another proposal: expanding the regulations’ “First Condition,” which could allow more than 75% of transfers to bypass enhanced due diligence.
“The potential widening of the First Condition should be considered with caution,” Cavanagh said. “This could mean that transfers currently receiving extra scrutiny would be processed automatically without further checks.”
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She added that while improving the transfer experience for members was important, it shouldn’t come at the cost of weaker scam protections. “Careful assessment of transfer requests remains as important as ever,” she said.
Transfer activity climbs as values dip
Meanwhile, pension transfer activity reached its highest point in a year. In June, the annualized rate hit 24 transfers per 1,000 scheme members—the most since June 2025. XPS suggested the rise could signal renewed interest in transfers, even as gilt yields stayed raised.
Transfer values, however, continued to slide. By the end of June, the average value dropped to £138,000, the lowest recorded in 2026. XPS attributed the decline to higher long-term inflation expectations and rising gilt yields, driven partly by volatility in global energy markets and uncertainty over oil prices.
The tension between higher transfer activity and lower values creates a tricky environment for savers. Many may feel pressured to move their pensions quickly, whether to consolidate accounts or chase better returns. But with scam warnings still flashing in nearly every case, the risk of losing everything to fraud hasn’t gone away.
XPS urged trustees to keep their guard up, even as the DWP weighs changes to the rules. The consultancy’s data suggests that for now, the threat isn’t fading—it’s just evolving.
