UK retirement planners wait on average one month for ceding companies to transfer pension funds, according to research from My Pension Experts.
The firm analysed data from over 3,950 pension transfers in the 2022/23 financial year and found on average, consumers must wait almost one month (29 days) for ceding companies to transfer their pension funds to a new provider.
Customers with some pension providers could wait for anything between 120 days on average down to 18 days.
Delays from ceding companies – pension scheme members’ existing providers – transferring money to an alternative provider can be “stressful and financially detrimental for consumers”, the firm 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.”
The data found that 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.
My Pension Expert said it is committed to working with the UK government and industry bodies to drive a higher level of transparency within the sector and, wherever possible, shortening ceding delays.
Tackle the problem
Lily Megson, policy director at My Pension Expert, 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.
“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.
“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 committed to tackling this issue, providing greater speed and transparency for pension customers across the country.”
A Nest spokesperson said: “At Nest, we’re always looking at ways to improve our transfer process to ensure it is efficient, easy to use, and robust. Our average transfer time is 21 days.
“New regulations, which came into force in December 2021, require additional checks to be undertaken when completing a pension transfer. This is an important safeguard to help protect people and their retirement savings from pension scams.”
A People’s Partnership spokesperson said: “It’s totally misleading to say that our average transfer time stands at an average of 59 days. This data is based on a sample size of 43 people, compared with the tens of thousands of transfers we process each year. It also includes the time taken for a member or receiving scheme to provide full information on the requirements and details needed for us to comply with regulations and process the transfer. It’s not possible to start or process a transfer without this information, which is required for consumer protection.
“The industry-recognised transfer figures show that our transfer times for last month stand at 18 days. We continually work to reduce these times.”