Savers could be losing £1.7bn from their pension pots due to poorly informed transfers made in the year to 30 June, according to master trust People’s Pension.

Pension transfer risk has increased by half a billion pounds since the previous Pension Transfer Outcomes Index report 18 months ago, a 42% increase.

The risk has surged by 120% since 2020, a 22% increase year-on-year, according to the most recent index.

The index models the financial impact of transferring pensions into higher-charging schemes.

People’s Pension forecasts that uninformed pension transfers will cost savers into the multi-billion-pounds by 2027, significantly earlier than its previous estimate of at the end of the decade.

Research for the index found that many savers struggle to find the basic information they need to accurately compare schemes.

Half of the pension savers surveyed (53%) said they don’t really understand how transfers work and a fifth (20%) think they are a gamble.

Pension savers lacked the confidence to make transfer decisions unsupported, with two thirds (65%) saying they need the help of a professional to consolidate a pension.

Patrick Health-Lay, CEO of People’s Pension, called for greater collaboration from the pensions industry.

He said: “With the governments 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 uniformed decisions like this.”

People’s Pension is the largest independent master trust in the UK, managing £35bn in assets on behalf of seven million pension savers.

YouGov surveyed 2157 adults on behalf of People’s Pension between 10 and 11 July.