Digital pensions platforms could provide £18.1 billion annual benefits for the UK economy. But their potential economic impacts risk being undermined by the transfer system, which a landmark report released today labelled “not fit for purpose”, and called for the transfer deadline to be slashed from six months to just 30 working days.
The report, commissioned by a coalition of nine leading digital pension platforms including AJ Bell, Freetrade, Hargreaves Lansdown, Interactive Investor, J.P. Morgan Personal Investing, Moneybox, Monzo, PensionBee, and Vanguard, reveals just how fundamental a modernisation of the "plumbing" of the pensions market is to securing improved retirement outcomes and realising the economic growth afforded by digital pension platforms.
The analysis finds that the direct-to-consumer digital pension sector has already become a central pillar of the UK economy, with £139 billion in assets under management—equivalent to 5% of UK GDP. By 2055, this sector alone is projected to contribute £9.1 billion to the economy through higher productivity and £9.0 billion through increased pensioner incomes.
Savers are currently confined by a 180-day statutory limit on transfers, a limit that seems out of touch with the rest of modern finance where a bank account can be switched in seven days and a Cash ISA transferred in fifteen. The report exposes how legacy providers often use "sludge" practices—such as requiring signatures on paper forms—to delay transfers. Even more concerning is the "outright misuse" of anti-scam legislation, where firms trigger "amber flags" for schemes provided by prominent FCA-regulated providers, for example.
These digital platforms have evolved from niche products into a mainstream lifeline, and for the UK’s four million self-employed workers, these digital platforms are not a luxury but a necessity. Self-employed workers are largely shut out of traditional workplace schemes, and currently, only 20% of the self-employed contribute to a private pension, and a staggering 55% are on track to retire with nothing but the State Pension. Digital personal pensions offer the flexibility and transparency these workers need to manage irregular incomes and consolidate multiple "fragmented pots" to provide a better retirement. Engaging workers more effectively with their pension pots is the first step to boost engagement and contribution rates.
The coalition of firms including AJ Bell, Freetrade, Hargreaves Lansdown, Interactive Investor, J.P. Morgan Personal Investing, Moneybox, Monzo, PensionBee, and Vanguard, is calling on the Government to adopt a series of "quick wins" and long-term reforms to get people engaging with their savings again.
Chief among these is the reduction of the transfer deadline to 30 working days and the introduction of a "digital-first" presumption that makes manual paperwork the exception rather than the rule. The report also recommends a universal "due-diligence checklist" to ensure transparency over the reasons for blocking transfers, alongside a long-term Pensions Tax Roadmap to avoid the harmful speculation that precedes every Budget.
The nine leading digital pension platforms recommend that:
Slash Transfer Deadlines: Amend DWP regulations to reduce the statutory transfer backstop to 30 working days.Digital-First Presumption: Mandate that digital journeys become the default, requiring firms to "comply or explain" if they insist on manual paperwork.Standardised Due Diligence: Introduce a universal "clean list" and checklist to prevent providers from inventing arbitrary reasons to block transfers.Pensions Tax Roadmap: Establish a long-term roadmap to end the "deleterious" consumer harm caused by speculative tax rumors before every Budget
As the Government prepares for the 2026 Pensions Dashboard launch, the report warns that increased visibility without a modern transfer system will only lead to mass consumer frustration.
By implementing these recommendations, policymakers can ensure that the retail personal pensions market—which could ultimately contribute up to £104 billion to the economy—continues to provide the choice and flexibility savers desperately need.
Brian Byrnes, Director of Personal Finance at Moneybox said: "The overall customer experience is only as good as the slowest innovators, and savers should not still be relying on paper processes in 2026. For too long, legacy providers have lagged in adopting innovations that improve saver engagement and outcomes. The FCA must look beyond headline statistics and examine why pension transfers so often stall. There are cases where providers flag ‘overseas investments’ while offering the same global tracker funds themselves, raising questions about whether these flags are being used to frustrate legitimate transfers and retain customer funds."
Lisa Picardo, Chief Business Officer UK at PensionBee: "Pensions belong to savers, not the Government or providers. Individuals carry the risk if their retirement savings fall short, so they should have real choice over how and where their money is invested. They must also be free to move providers easily, yet the transfer process still isn’t fit for purpose. As workplace schemes consolidate, and investment strategies converge and move towards private markets, it’s vital that savers can still vote with their feet when it comes to what may be the biggest and most consequential pot of money they'll ever own."
Tom Selby, Director of Public Policy at AJ Bell: “With the development of the pensions environment at a pivotal crossroads, decisive policy action has never been so important. Government, regulators, and the pensions industry need to work together to tear down any existing barriers to support the government’s retail investing drive and turn Brits from savers into a nation of investors. Driving down transfers times across the market is essential, as is aligning the regulatory approach for retail and workplace pensions so we can deliver better outcomes for investors and support the UK’s retail investment ambitions.”
Viktor Nebehaj, CEO at Freetrade: “The current pension transfer system is not fit for purpose. At a time when consumers can switch bank accounts in days, it is unacceptable that pension transfers still have a six month deadline. Outdated, manual processes restrict choice, frustrate savers and risk undermining the benefits digital pension platforms can deliver. We need urgent reform to make pension transfers faster, simpler and fit for modern consumers.”
Helen Morrissey, Head of Retirement Analysis, Hargreaves Lansdown: “The pensions market is changing and personal pensions have a growing role to play, helping people take control of their savings, and understanding how to build for the retirement they want. Regulation should support this end with transfers taking days not weeks. The current pension transfer system is woefully out of step with wider financial services. Longer term we would like to see government revisit the Lifetime Pension Pot set up which allows people to choose which provider receives their contributions. It’s a step that enables people to keep track of their pensions and could be a gamechanger in how people engage with them.”
Colin Doyle, Head of Pension Investors at interactive investor: “This report surfaces crucial insights on the value and evolution of the UK personal pensions market, highlighting the need for greater engagement and awareness – which chimes with the findings of our latest Great British Retirement Survey. We’re proud to play our part in reshaping the UK DC pensions space by continuing to innovate and educate, helping meet a diverse set of consumer needs. The actions in this report are a welcome wake-up call for our industry and policymakers – we’ll continue to fight for consumer confidence to help them take control of their financial futures.”
Jo Phillips, General Manager, Pensions, Investments and Savings at Monzo: “As a leading digital bank with more than 14 million customers, we transfer thousands of pensions every month - that’s around two requests every minute. This demand shows how a simple, digital-first, and transparent pension product can truly engage people with their retirement savings. We support reforms that empower and protect consumers while enabling innovation, competition, and seamless transfers to thrive.”
James Larsen, Head of Strategy and Offer, Vanguard UK Personal Investor: “We need standardised, digital-first pension transfers and a shift from a 180-day statutory limit to 30 working days. Delays leave savings stuck or uninvested and people disengaged. A system that works better for pensions savers will give more people a better chance of a comfortable retirement.”
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