The newest XPS Pension Switch Watch report has highlighted that pension switch volumes have been 50% decrease in March than a 12 months earlier.
Switch values confirmed a small enhance in March however exercise stays low, the pension supplier reported.
The Switch Worth Index noticed a lower of about 2%, partly pushed by will increase in gilt yields.
The Switch Exercise Index confirmed a marginal enhance to an annualised fee of 19 in each 1,000 members transferring their advantages to various preparations.
The current pattern of low switch volumes continued in Q1 2024, with the Switch Exercise Index 50% decrease than this time final 12 months.
The agency mentioned the autumn could also be pushed by pension savers being deterred by decrease switch worth quotes, significantly if they’ve beforehand obtained a a lot greater citation.
XPS’s Switch Worth Index rose barely throughout March 2024 to £160,000, resulting in an general lower of about 2% over Q1 2024. Nevertheless, this didn’t offset the falls in previous months.
Though switch values have been comparatively secure throughout Q1 2024, the March month-end worth was considerably lower than a 12 months in the past, when it stood at £175,000.
In response to XPS’s Rip-off Flag Index, 88% of circumstances reviewed by the XPS Rip-off Safety Service in March 2024 raised at the least one rip-off warning flag. This represents a rise of 1% in comparison with February 2024, marking the sixth successive month that the Index has remained at or under 90%.
The DWP has just lately been partaking with business our bodies because it considers modifications to the switch laws to strengthen trustees’ capability to guard members towards scams, whereas permitting protected transfers to be processed in a well timed manner. The DWP’s modifications are anticipated to incorporate a elimination of the abroad flag and inspiring trustees to function a ‘inexperienced record’ of authorized service suppliers.
The XPS Pensions Group mentioned it welcomed potential modifications to switch laws however cautioned that trustees wanted to make sure they applied “sturdy rip-off safety processes.”
Helen Cavanagh, head of member choices, XPS Pensions Group, mentioned: “In early 2024 we noticed switch values expertise their most secure quarter since 2022, however values nonetheless stay about 10% decrease than a 12 months in the past. Decrease switch values could possibly be driving the Switch Exercise Index to its lowest recorded degree.
“Potential modifications to the switch laws could lead the Rip-off Flag Index to fall in future. Modifications to the laws are welcomed however trustees might want to proceed to have a sturdy rip-off safety course of in place.”
