The number of defined contribution small pot transfers increased by 40% over the last two years, according to research by Origo. 

Data from the fintech's Transfer Service found between 2020 and 2022, the number of pension pot transfers valued under £10,000 rose by 42%. It also found the number of pots with a value of less than £1,000 increased by 32%.

The research revealed the number of pots valued below £30,000, which represents the threshold for which financial advice must be sought before a transfer can take place, increased by 39%, while the number of transfers across pots of all sizes rose by 34%.

The research also discovered the most common ages the pension transfers took place were 55, 56 and 60 years old. Similarly, the top three ages at which pension to annuity transfers, of which the average values of the transfers exceeded £30,000, were 65, 66 and 60 years old.

Origo chief executive Anthony Rafferty said: "Market performance will have affected pension pot sizes, but while Origo data does not show the reason for a transfer, it would not be unreasonable to suggest the economic situation in the UK has been playing into whether and when some consumers are accessing their pensions.

"Consumers accessing their pensions as short-term fixes to the cost of living crisis is a concern for the industry, as when inflation subsides, they could potentially have damaged their long-term and retirement saving as a result."

This comes after Origo last week revealed its Transfer Service had, for the second year in a row, undertaken more than one million transfers last year.