XPS Transfer Watch’s Transfer Activity Index dropped by almost a quarter to 55 in 10,000 members transferring per year in April.

The XPS Red Flag Index identified at least one warning sign of a potential scam or poor member outcomes in 59% of transfers processed in April, up from 52% in March.

The Transfer Value Index remained largely unchanged over the month.

Mark Barlow, partner at XPS Pensions Group, said it was disappointing to see an increase in the Red Flag Index after continual falls over the previous three months.

He said: “With warning signs of poor member outcomes remaining so high, we welcome the FCA’s decision to extend their thematic review with the aim of driving up standards of pensions advice. In the meantime, we continue to work with trustees and employers to ensure their members are able to access high quality advice.”

The Government last week announced plans to tackle pension transfer fraud. Under the proposals from the Department for Work and Pensions, providers will be required to ask pension savers transferring to a pension scheme not on a prescribed ‘safe destination’ list a series of questions to determine whether they are at risk of being scammed.

Nearly £2m has already been lost to pension fraud this year with the true cost likely to be much higher as victims often do not realise they have been scammed for several years.

Data from Action Fraud shows there has been an increase in reporting so far this year, with 107 reports of pension fraud received in the first three months of 2021, a 45% increase on the same period last year.

An estimated £1.8m has been lost to pension scams so far this year. Despite this there has been a steady fall in pension scam reports over the past few years with data from Action Fraud showing a fall in reports from 1,788 in 2014 to 358 in 2020, a reduction of almost 80%.