PensionBee has released A Switch In Time, the first in a three-part campaign series calling for the introduction of a 10-day Pension Switch Guarantee, and exposing the severe inefficiencies and rogue practices that continue to plague the UK’s pension switching system.
The report, created in partnership with financial services consultancy, the lang cat, paints a stark picture of the delays facing consumers as observed by the professional advice industry, looks at the transfer time data – and calls for urgent legislative reform.
While some pension transfers take under seven working days, others drag on for months or even years. In one extreme case uncovered in the research, an adviser reported a customer waiting over 1,000 days for a transfer to complete. The report highlights that these unreasonable delays are not only avoidable, but that they are also potentially in breach of the Financial Conduct Authority’s (FCA) Consumer Duty – causing harm to consumers by preventing them from accessing better products and achieving good outcomes.
Industry dysfunction damaging trust
According to the research, 79% of financial advisers believe transfer delays have a moderate to severe impact on trust. 82% agree that problematic transfers harm the reputation of the financial services industry, while more than 50% report that transfer delays frequently damage client communication.
The profession is unequivocal in its demand for reform:
97% believe the worst offenders should be required to compensate affected customers.
96% support a change in primary legislation to enforce a reasonable pension switch timeframe.
74% want a consistent process across providers.
Proof that speed is possible – but far from the norm
The report also reveals that some firms are achieving switches in less than 10 days – proof that swift transfers are possible. However, others are taking more than 60 days, with the worst-performing firms taking an average of 66.4 days in 2024.
PensionBee’s own average transfer-out time in 2024 was 9.39 days, demonstrating that secure, fast transfers are not only feasible – they should be expected.
Reform the flag system, enforce accountability and mandate reasonable pension switching timeframes
The report advocates for immediate reform of the Amber and Red Flag Scam Prevention process, citing widespread misuse that is creating unnecessary delays. It also urges the FCA, The Pensions Regulator, and the Government to legislate for a 10-day Pension Switch Guarantee, supported by binding service standards, mandatory transparency, and penalties for non-compliance.
Lisa Picardo, Chief Business Officer UK at PensionBee, said: “The evidence is clear: delays are harming consumers and undermining trust in our industry. The system is letting poor performers off the hook and rewarding the wrong behaviours. The technology and standards exist to support more efficient pension transfers. The will among advisers and consumers exists to see change. What’s missing is meaningful legislation and regulatory enforcement.
“The Government and regulators must now step in and level the playing field, reshaping the pension transfer system that so desperately needs modernisation. That means primary legislation. And above all, that means putting the interests of consumers first. Swift switching isn’t a ‘nice to have’ — it should be a basic right. ”
Steve Nelson, Insight Director at the lang cat, said: “What gets measured gets done, and it's clear the financial services sector urgently needs to measure and fix the systemic inefficiencies around pension switches that are damaging trust across the board. The delays evident from this research aren't just frustrating admin issues. They’re symptomatic of a wider dysfunction rooted in antiquated manual processes.
“If we want to build trust with the public and close the savings and pensions gaps, the whole industry needs to up its game and be held accountable. It needs to modernise systems and start acting with a shared sense of urgency and responsibility. The advice profession has spoken clearly in this research. Now it’s time for those who are able to make a difference to listen and step up.”
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