Lengthy delays in pension transfers are causing some savers to abandon the process, according to consumer group Which?. The organisation has criticised the current system as “not fit for purpose”, highlighting cases where transfers took up to 15 months.
Which? noted that providers are permitted to take up to six months to complete a transfer request. In one case, a 61-year-old man consolidated three pension pots; two transfers completed within months, but the third took 15 months, causing him to question the safety of his savings. A financial adviser also reported a nine-month wait for a client.
The consumer group attributed bottlenecks to antiquated processes, such as requiring wet ink signatures, and anti-fraud flagging systems that can delay legitimate requests. Which? warned that with pension dashboards being developed, more people may engage with their retirement plans, increasing the need for a smoother system.
The Financial Conduct Authority (FCA) is proposing reforms, including a 10-day data-sharing deadline, clear side-by-side comparisons, and acceptance of digital signatures. The FCA told Which? that over 75% of sampled firms complete transfers within 10 days, and the new proposals aim to provide clearer, more timely information.
Jenny Ross, Which? Money editor, said: “It’s essential the industry urgently gets to grips with the issues facing pension savers and ensures a consistent service for those moving their retirement pots.”
