Pension delays have been a longstanding issue within the UK financial service industry, creating significant hurdles for consumers attempting to access their hard-earned savings.
Delays encountered when ceding companies, the existing providers of pension scheme members, transfer money to an alternative provider, which can be stressful and financially detrimental for consumers.
These delays in the transfer process can disrupt pension plans and make it challenging to align people’s pension savings with their desired retirement timeline. And for those who are reliant on their pension as their main source of income, this can be an incredibly stressful and worrying time.
At My Pension Expert, we believe that more must be done to draw attention to the issue. So, we set out to uncover the extent of the problem through our Retirement Fairness Index 2023.
Retirement Fairness Index
My Pension Expert analysed data from 3,953 pension transfers that we managed on behalf of clients during the 2022/23 financial year.
Measured from the date the transfer application was submitted to a pension provider to when My Pension Expert received confirmation that the fund had been transferred, the analysis revealed that, on average, it took 29 days for ceding companies to move the money.
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.
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) were the ceding companies that took the longest average time to transfer funds, according to My Pension Expert’s data.
The data clearly demonstrates that retirement planners in the UK must wait far too long for their hard-earned savings and assets to be transferred from ceding companies to a new provider. It is a serious problem that the government and pension industry must collectively solve.
Our aims
My Pension Expert is dedicated to collaborating with the Government and industry bodies to achieve a higher level of transparency within the pension sector and, whenever feasible, reduce the delays in transferring funds from ceding companies.
While it is, of course, necessary for proper security checks and due diligence, slow and opaque processes leave customers questioning the whereabouts of their funds and the reasons behind prolonged transfer times. It is crucial to strike a balance between conducting checks and providing a timely transfer service that safeguards valuable pension benefits.
It is incredibly poor that the prevailing notion in the industry continues to be that it is acceptable for pension transfers to take weeks or even months to complete. This practice falls short of expectations and undermines the trust people place in the pensions sector.
To address these concerns, we advocate for a thorough review of regulations governing pension transfers, with a focus on identifying areas for improvement. It is imperative to outline strategies that can expedite the transfer process while maintaining the necessary security measures. Additionally, providers must ensure they have sufficient resources to handle pension transfers efficiently, and punitive measures should be considered for those unnecessarily prolonging the process.
Transparency plays a pivotal role in building trust. Retirement planners should have a clear view of their pension pots’ value, performance, and the progress of the transfer process when switching providers. My Pension Expert is committed to tackling this issue head-on by prioritizing speed and transparency, ensuring that pension customers across the country receive the timely and transparent service they deserve.
| Ceding Scheme | Transfers | Avg. Transfer Timescale |
|---|---|---|
| Clerical Medical | 37 | 21.81 |
| Reassure | 366 | 21.96 |
| Sun Life Financial Canada | 71 | 22.87 |
| Standard Life | 287 | 23.97 |
| Scottish Widows | 346 | 24.07 |
| Zurich | 137 | 24.68 |
| Fidelity | 38 | 24.74 |
| Aviva | 846 | 25.49 |
| Yorsipp pension | 39 | 25.51 |
| Legal & General | 154 | 27.63 |
| Phoenix | 288 | 28.31 |
| Aegon | 358 | 28.69 |
| Hargreaves Lansdown | 22 | 28.77 |
| Prudential | 326 | 29.80 |
| Utmost Life and Pensions | 42 | 31.26 |
| Royal London | 270 | 31.82 |
| LV= | 41 | 32.39 |
| Sanlam | 15 | 34.07 |
| Countrywide Assured | 37 | 38.62 |
| B&CE | 17 | 50.82 |
| Mercer | 16 | 55.50 |
| NOW: Pensions | 14 | 57.07 |
| Scottish Friendly | 32 | 57.66 |
| The People’s Pension | 43 | 59.12 |
| Nest | 58 | 59.89 |
| Will’s Tower Watson | 28 | 62.43 |
| DHL Pension Department | 15 | 65.00 |
| XPS Administration | ||
| Total | 3953 | 28.60 |