Transfers of pensions by men were almost twice as likely to raise a warning sign of a pension scam compared to transfers by women, according to research from XPS Pensions Group.
According to research from XPS’s Scam Protection Service over the course of the year, 11 per cent of transfer requests from male pension savers displayed a ‘red flag’ as defined in the regulations for a pension scam, compared to 6 per cent for female pension savers.
Higher transfer values were also more likely to reveal scam signs. Over the course of 2021, the average size of a pension transfer was £211,000, while the average size of a transfer exhibiting the most serious warning signs of a scam was £279,000.
These figures follow the Department for Work and Pensions’ new legislation, which went into effect last November and aims to protect pension savers from losing their life savings in a pension scam. Pension providers will have the authority to halt transfers that raise a regulatory red flag for a scam, such as a member receiving advice from an adviser without the necessary permissions, a member requesting a transfer after receiving unsolicited contact from a third party, or a member feeling pressured to transfer. Providers can also ‘pause’ transfers which demonstrates less serious ‘amber flags’ until a member is able to get additional guidance.
XPS Pensions Group client lead for member engagement Helen Cavanagh says: “A lot of the red flags which we see plaguing transfers are related to advisors who do not have the correct permissions to provide such advice. It’s crucial that members receive quality advice from a properly authorised, experienced advisor if they are to get the best outcomes, and schemes have an important role to play in not only providing access to that advice but also blocking or pausing transfers that they suspect may be fraudulent.”
XPS Pensions Group partner Mark Barlow says: “Pension transfers – especially high-value ones – continue to be a target for fraudsters. It’s important that pension schemes do everything in their power to ensure that their members are protected from losing their life savings to scams, particularly in light of the new legislation from Government, which requires them to do so.”
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