Britons are waiting an average of one month to complete a transfer of their pension funds between providers, a new report has found.
However, delays from ceding companies – pension scheme members’ existing providers – transferring money to an alternative provider can be stressful and “financially detrimental”, Lily Megson, policy director at independent retirement advisor My Pension Expert has said.
Ms Megson said: “Our data, spanning almost 4,000 pension transfers, clearly demonstrates that retirement planners in the UK are having to wait far too long for their hard-earned savings and investments to be transferred from ceding companies to a new provider.
“It is a significant issue and one that the Government and pension sector must work together to address.”
Data from over 3,950 pension transfers in the last financial year found people had to wait 29 days on average for the process to complete.
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Within this dataset, customers with some pension providers could wait for anything between 120 days on average down to 18 days depending on which firm their pensions pots were with.
Ms Megson said: “Some will miss out on better returns as they wait for funds to move between providers, while others are reliant on their pension as their only source of income, so having it tied up in a pending transfer can leave them financially exposed.”
According to the research, Prudential (an average of 18 days per transfer), Clerical Medical (22 days), Reassure (22 days), Sun Life Financial of Canada (23 days), Standard Life (23 days) and Scottish Widows (24 days) were the quickest of the ceding companies when it came to transferring their customers’ funds to a new provider in the last financial year.
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However, with some firms making Britons wait between 58 and 120 days, Mr Megson said the transfer process is too often “slow and opaque”, leaving customers wondering where their funds are and why providers are taking so much time to transfer them across.
Ms Megson continued: “While we must accept that this cannot happen instantaneously – security checks and due diligence is required – we must fight against what has become an accepted notion in the industry that pension transfers can take weeks if not months to be completed.
“It is not good enough and undermines people’s trust in the pensions sector.
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“Transparency is key. Retirement planners need to be able to see how much money they have in their pension pots, how those pots are performing, and, when transferring between providers, exactly how this process is proceeding.”
My Pension Expert is an advised retirement income specialist, founded in 2010.
The firm specialises in providing independent advice to UK consumers about their pension plans and is currently working with the Government and industry bodies to drive a higher level of transparency within the sector.
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