Of the transfers made in the period, 47.5% were pensions of £10,000 or under, and around 15% of the total were pots of under £1,000.
The growing number of small pots and the issue of scattered holdings is one currently being addressed by the industry and it is an industry challenge Origo can help address, says Origo CEO Anthony Rafferty.
“Concerns have been raised recently around the growing number of small pots being generated within pensions schemes, in particular through auto-enrolment, as workers change employers. This is an issue which will continue to grow and cause issues around scattered pension holdings and value for money, as well as sub-optimal outcomes for consumers at retirement.
“The Pensions Dashboard will help individuals to identify and locate their various pots but may exacerbate issues relating to small pots. If the industry is to help consumers efficiently consolidate the growing volume of small pots into meaningful holdings, more automation will be required to reduce the labour overheads of pensions companies, which are the main costs associated with transfers.
“Origo is agnostic on the size of the pension pot being transferred. Our aim is to help product providers complete the transfer for the end consumer as quickly as possible, through automating the process and providing a transparent, cost effective and audited process.
“With the vast majority of the industry’s transfers flowing through Origo Transfers –currently over 150 financial services brands use the service – and nearly 50% of transfers at sub £10,000 in value, we are already handling a substantial number of small pots as they are moved between providers.
“We stand ready and able to adapt the system to accommodate any mass migration of small pots that may be required to be moved between providers as individuals look to consolidate their pension holdings. In this respect we have small pots covered.”
Origo Transfer Index data
Latest Origo Transfer Index (OTI) figures show that overall transfers are taking around an extra day to complete than in Q1 2021, which may in part be attributable to the rise in volumes seen in recent months*.
OTI is an Origo initiative which currently consists of 27 leading providers who voluntarily publish their transfer times through the Index, contributing to transparency of data in the industry. The Index aims to improve customer outcomes by providing an industry benchmark for average times taken to transfer a pension to another provider, against which companies can compare their own transfer performance.
Data for the 12 months to 30 June 2021, for transfers made through the Origo Transfer Service, show the transfer time across OTI participants was an average of 10.2 days (up from 9.2) for simple transfers (i.e. those where the ceding provider has complete control over the ceding process) and 12.5 days (up from 11.7) for overall transfers (where the provider may or may not have control over the entire process).
Providers that have improved their yearly average performance Q1 to Q2 2021 include: Elevate, Fidelity, Forester Life, Hargreaves Lansdown, Legal and General, LV=, NFU Mutual, Parmenion, Pheonix Group and Zurich Group.
*XPS Transfer Watch – transfer activity continues to increase to highest levels since July 2020: https://www.xpsgroup.com/news-and-views/transfer-activity-continues-to-increase-to-highest-levels-since-july-2020/
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