The survey by online platform Pensionbee looked at the length of time it took to carry out a pension transfer and the fees levied by companies across the UK.
State Street-backed Pensionbee is aimed at savers looking to consolidate multiple pots into one place and offers a dashboard service.
Researchers found the most individual customers paid in exit fees was £12,245 ($16,076, €13,736) and £10,543 – both with Phoenix.
The research further indicated that the highest exit fees are on with-profits pensions, meaning they escape the UK regulators fee cap rules.
The fees are called market value reductions, also known as a market value adjustment or surrender value reduction. These deductions can be applied to with-profits policies that are surrendered early.
In another case, a saver with Phoenix Life was faced with a charge of 96% of their total pot to move to Pensionbee.
Calculated as a percentage, Abbey Life and ReAssure imposed similarly excessive exit fees of 69% and 56%, respectively.
The firm responsible for the slowest average transfer time was Xafinity at 52 days.
This is seven days longer than the second slowest company, Now: Pensions, which averaged 45 days.
Mercer takes 44 days, Towers Watson averaged 41 days, with Aon Hewitt proving similarly sluggish.
Pensionbee did praise Aviva, Scottish Widows, B&CE, Canada Life and Phoenix Life for all managing to transfer a pension in under two weeks, on average.
A spokesperson for Phoenix Life told International Adviser: “Pensionbee publishes these reports every year and we are never privy to the data they are basing the findings on. We are therefore unable to confirm if the exit charges quoted are correct.
“The report lists MVRs as exit charges, which they are not. They are in place to ensure policyholders take a fair proportion of the fund when they exit and policyholders that remain are not penalised.
“Phoenix has significantly improved the financial position of its many with-profits funds (to the extent that 75% of our with-profits policies are now paying an annual bonus again and very few policies have an MVR applied on early exit), however in some cases, the combination of generous guarantees and low investment returns over a significant portion of the policies’ lives means that market value reductions must be applied.
“If Pensionbee could share the details of the cases they list, we could double check if the figures are correct.”
The spokesperson added that Phoenix is “pleased to see that Pensionbee acknowledges the work we have undertaken to improve pension transfer times”.
Researchers for Pensionbee found an average annual charge of 62.1% imposed by Now: Pensions – by far the biggest in the study.
Pensionbee calculated the charge by adding up all fees; including fund fees, fixed £-based fees and any other policy fees that may apply.
In the case of Now: Pensions, a £-based fee of £18 (in addition to a percentage-based fee of 0.3%) is applied to fairly small pension values. Approximately 40% of the pensions in the sample of 91 were below £100.
The result is a high charge as a proportion of the pension pot.
Currently, these charges are permitted under charge cap legislation.
Largely though, a number of providers appear to be operating a fairer fee structure, the report authors noted.
Legal & General charge the lowest average annual charge at 0.3%, with Fidelity and B&CE following closely with fees of 0.4% and 0.5%, respectively.
Changing for the better
Commenting on the findings Romi Savova, chief executive of PensionBee, said: “Things are definitely changing for the better in the pension industry, but a lot of work remains to improve switching times and completely eliminate all forms of exit fees.
“There are a handful of providers who continue to treat customers unfairly and we are determined to stay at the forefront of customers’ rights to have better pensions and ultimately a decent retirement.”
The survey was based on 7,292 transfers to Pensionbee’s platform.