Projected losses from poorly informed pension transfer decisions have increased by half a billion pounds in the past 18 months, according to analysis from People’s Pension, which has prompted renewed calls for action.

The group's Pension transfer Outcomes Index revealed that savers could be missing out on £1.7bn due to poorly informed transfers made in the year to 30 June 2025, marking a 42 per cent increase from the £1.2bn at risk from decisions made in 2023.

The index, which models the financial impact of transferring pensions into higher-charging schemes, showed that this risk has increased by 120 per cent since 2023.

As transfer activity continues to rise, the associated risk is growing at an average rate of 22 per cent per year, with the group's previous research revealing that savers often make pension transfer decisions without fully grasping the financial consequences

Based on current trends, People's Pension warned that uninformed transfers will become a multi-billion-pound problem by 2027, which is "significantly earlier" than its previous estimate of the end of the decade.

Research from People's Pension suggested that savers are also keen for greater transparency, as it found that nearly all (96 per cent) respondents think pension providers should be required to tell people about the impact of the charges they will pay if they transfer a pension to a new provider.

The research also revealed that just over half (53 per cent) of pension savers don’t really understand how transfers work and a fifth (20 per cent) think they are a gamble.

Given this, it is perhaps unsurprising that pension savers lack confidence to make transfer decisions unsupported, with two-thirds (65 per cent) thinking they need the help of a professional to consolidate a pension.

To help address these concerns, People's Pension reiterated its calls for greater collaboration from the pensions industry to enable people to compare their pensions based on the information that matters most.

The provider also highlighted its five-point plan, which outlined calls to ban transfer incentives and industry collaboration to create a consumer-facing ‘value for money’ framework, which must be clearly displayed on any future commercial pension dashboards.

This also builds on the recent review of pension transfers by the Financial Conduct Authority, which found that, while most providers were transferring pensions in a reasonable timeframe, concerns remain around the use of incentives.

People's Pension CEO, Patrick Heath-Lay, said: “It’s alarming to see such a rapid escalation of the pension transfers problem, which is fast becoming a crisis, especially when you consider the significant impact on people’s retirement savings.

"Savers risk ending up with thousands of pounds less and working for years more. And with massive rises in transfer volumes expected when pensions dashboards come into effect, it is essential that the industry acts now to address this issue.

“Pension savers must be able to easily access and compare all the information they need to make informed, educated transfer decisions. It is therefore vital that simple, easy-to-understand comparisons of value are on commercial pensions dashboards when they launch.

“With the government's pension review focusing on value only in the workplace pension market and a new commission looking at adequacy of saving, it is appalling to see the amount of value being needlessly lost due to the vulnerability of consumers.

"More onus must be put on providers to flag to members when they are transferring to higher charging schemes to ensure members understand the long term implications.

"With so many people under-pensioned it is unacceptable for savers to be losing out by making uninformed decisions like this.”

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