My Pension Expert has found that on average a transfer between pension pots takes almost one month.
It is calling on the government and pension sector to work together to address this.
The advised retirement income specialist’s 2023 Retirement Fairness Index found that retirement planners and consumers in the UK have to wait on average 29 days for a transfer.
An issue that arises from the time taken for the transfer is that certain consumers may miss out on better returns as they wait for funds to move between providers.
Additionally, to those who solely rely on their pension as their only source of income, having it tied up in a pending transfer, can leave people financially exposed.
My Pension Expert said that transferring money to an alternative provider can be stressful and financially detrimental.
The index discovered a vast difference in time between different pension providers.
Prudential came in quickest with an average transfer time of 18 days, with Clerical Medical at second (22 days) and Reassure at third (22 days).
These were followed by Sun Life Financial of Canada (23 days), Standard Life (23 days) and Scottish Widows (24 days).
By contrast the companies that took the longest were XPS Administration (120 days), DHL Pension Department (65 days), Willis Towers Watson (62 days), Nest (60 days), The People’s Pension (59 days) and Scottish Friendly (58 days).
My Pension Expert policy director Lily 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.”
As part of the 2023 Retirement Fairness Index, My Pension Expert analysed data from 3,953 pension transfers that it managed on behalf of clients during the 2022/23 financial year.
The time was measured from the date an application was submitted to a pension provider to when My Pension Expert received confirmation that the fund had been transferred.
Megson added: “The process is too often slow and opaque, leaving the customer wondering where their funds are and why providers are taking so much time to transfer them across.
“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.”
