Transfer values increased during March, recovering around one-third of a sharp fall experienced in February, consultancy firm XPS has said, attributing the rise to expectations of future inflation.

Pension transfer activity remained steady last month, with fewer transfers flagged as a suspected scam; but there were still one or more flags identified in just over half of all transfers processed in March.

Helen Cavanagh, a consultant at XPS Pensions Group, said she was pleased to see the fall in red flags. "However, more than half of cases are still showing warning signs that could indicate a scam, or at the very least, the potential for poor member outcomes. This remains much higher than the level of red flags we were seeing before the pandemic," she said.

Cavanagh noted that the firm is identifying many cases which are described as being ‘poor practice’ in the new FCA guidance.

"We are also seeing that the additional disclosure requirements introduced last year are not being met by some advisers," she added, saying she hopes that new guidance by the Financial Conduct Authority will help to increase standards among advisers.

Together with the Pensions Regulator, the FCA also published a guide for employers and trustees on where it sets the boundary between pensions guidance and financial advice.

Mark Barlow, a partner at XPS Pensions Group, said the joint guide from the FCA and TPR provided welcome clarity for schemes that want to help their members when they’re considering a life-changing decision like whether to transfer their pension.  

"It is particularly helpful to see the guide acknowledging the valuable role that employers and trustees can play in supporting members in accessing high quality financial advice," he added.