Despite slow transfer times being identified as a problem by the Financial Conduct Authority back in 2015, the issue remains prevalent amongst a number of key players. This includes The People’s Pension, whose average transfer times doubled from 2020 to 2022, reaching 39.5 days; closely followed by LV= which recorded an average transfer time of 36 days and NEST at 21.8 days in 2022.
However, by participating in the Origo Index, these providers do display a commitment to transparency and the eventual improvement of their transfer times. A large number of providers and third-party administrators continue to not participate in electronic pension transfers or publicly disclose their transfer times on Origo or elsewhere, showing limited engagement in the industry’s efforts to improve transfer efficiency for consumers.
PensionBee’s own pension transfer data reveals providers that have chosen not to join Origo and/or do not process transfers electronically, such as large pension administrators, operate with extremely lengthy transfer times. XPS Administration recorded an alarming average transfer time to PensionBee of 57 days in 2022. Meanwhile, Mercer took on average 33 days, Capita 32 days, Willis Towers Watson 26 days and Aon Hewitt 24 days in the same year.
In contrast, PensionBee has consistently taken an average of 10 days to complete a pension transfer request over the same period, as is in line with its proposed ‘Pension Switch Guarantee’ which would ensure switching providers is a quick, efficient and secure process which happens electronically within 10 days.
Becky O’Connor, Director of Public Affairs at PensionBee, commented: “It’s very concerning to see a sharp rise in pension transfer times. This latest data proves just how crucial it is to move away from self-regulation within the pensions industry and instead implement a ‘10-day Pension Switch Guarantee’, a time frame the Financial Ombudsman Service is already independently enforcing.
This is essential to help restore confidence and trust in the pension system, allowing consumers to take control of their financial future and plan ahead for a happy retirement.
Customers deserve to have an effective pension transfer process and the ability to voice complaints to the Ombudsman, giving them the same switching rights as is seen in other markets.”
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