In fact, the vast majority of pension providers included in Origo’s most recent index have increased the time it takes to process transfer requests over the last three years, with transfer times peaking in 2022 at an average of 14 days. They have dropped slightly in the last year.
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. LV= has consistently taken 25 days or longer to transfer a pension from 2020 to 2023. Despite efforts to improve their transfer times, The People’s Partnership has seen an increase of more than 50% in transfer times over the same period. Meanwhile, Vanguard, since joining the index in 2021 has recorded its lengthiest transfer time, 23 days in 2023.
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 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 concerning to see a notable rise in transfer times over the last three years. This latest data underscores the urgency of a transition away from self-regulation within the pensions industry to the implementation of a ‘10-day Pension Switch Guarantee’. This timeframe aligns with the independent enforcement already undertaken by the Financial Ombudsman Service. Such a shift is crucial to rebuilding confidence and trust in the pension system, empowering consumers to take charge of their financial future.
Consumers deserve an efficient pension transfer process and the ability to voice grievances to the Ombudsman, ensuring they have the same switching rights as observed in other markets.”
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