This is the first time XPS’s Scam Flag Index has fallen below 90% since May 2022.

XPS said the main driver behind the fall was a larger number of transfers being used to purchase an immediate annuity, rather than being moved to a personal pension or other product.

Rising interest rates have pushed up annuity rates and made annuities a more attractive potential option to advisers and their clients.

Transfers into annuities are at lower risk of generating scam warning flags than transfers into other receiving vehicles. This is because the member is not required to make any investment decisions, reducing the opportunities for a scammer to influence the member and their decision making.

The number of members transferring rose during the month.

XPS Pension Group’s Transfer Activity Index recovered from its previous low during August, with an annualised rate of 28 members per 100,000 transferring out of their current scheme to an alternative arrangement.

XPS Pension Group’s Transfer Value Index continued to remain fairly stable, finishing the month at £159,000.

XPS Pensions Group’s Transfer Value Index shows the estimated Cash Transfer Value of a 64-year-old member with a pension of £10,000 a year with typical inflation increases. The value changes over time with market movements. Mortality assumptions are reviewed periodically.

Separate research from Standard Life said that while annuity rates have reached their highest level in two decades, half of over 50s do not understand how they work.

When 2,000 over 50 year olds were asked about their overall knowledge of annuities, and whether 18 statements were true or false, on average, half (49%) responded ‘don't know’ across all statements.

According to the provider, annuity rates have improved by 20% since June 2022, and have seen a total increase of 48% since the start of 2022.