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Over 50% of pension transfers covered by one pension firm’s scam protection service have been flagged up as at risk of a scam since the pandemic hit.

Nearly half of financial advisers who currently offer pension transfers may quit the market in the next 12 months, new research has warned.

After an unsteady period, defined benefit (DB) pension transfer values increased to a record high during June and the number of members taking a transfer value rebounded strongly too.

The Pensions Regulator has warned savers looking to transfer their pension pot during the Covid-19 outbreak that the move is “unlikely” to be in their best long term interests.

Defined benefit transfer values slumped by 3% in March and the number of members asking for a transfer value fell to a record low, according to figures released by the XPS Transfer Watch today.

The Personal Finance Society says it has received new evidence that some of its 40,000 members are being hit with huge increases in Professional Indemnity premiums and facing restricted cover.

Many advisers are failing to provide pension transfer advice of an "acceptable standard" says the FCA which is to scrutinise the harm to consumers from advisers who levy ‘excessive fees and charges.’

More than 30 financial advisory firms have quit the pension transfer advice market in the past three months after struggling to find professional indemnity insurance cover, the Personal Finance Society has said.

Transfer valued endured a volatile September, according to the latest data from XPS Pensions Group.

DB transfer values rose to record highs in August 2019, while the number of members requesting a transfer value continues to increase, according to XPS Transfer Watch.


XPS Pensions Group’s ‘Transfer Value Index’ jumped sharply to an all-time high of £258,200 on 21 August 2019; up from £247,400 at the end of July 2019.

The increase was said to have been “largely driven by a significant fall in gilt yields during August, partially offset by a small fall in inflation expectations”. 

XPS Pensions Group reported an increase in the number of transfer quotes being requested across some of its schemes, with some members choosing to pay for an updated calculation with transfer values at their peak. 

 

Mark Barlow, partner, XPS Pensions Group, said: “The impacts of recent volatile markets have seen transfer values increase steadily over the last two months, with an all time high in August.

“The continuing fall in gilt yields has pushed transfer values to new record highs, around 10% higher than they were this time last year.

“Although there is a lot of uncertainty around the future of the financial markets, an increase in transfer values will mean we are likely to see a lot of members investigating their options.
 
“Trustees and sponsors should ensure that members considering long term irreversible decisions are being provided with sufficient education and support to enable them to make the right decision for their circumstances and financial futures.

“We would also recommend schemes consider how the substantial changes in market conditions have affected the funding strategy and whether, in light of this, the transfer value basis remains appropriate.”

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