New research from PensionBee finds that 42% of savers who have previously tried to change pension providers, feel that the process was so difficult that they would not attempt another transfer. Many savers also reported issues accessing support from their providers during the transfer process, with more than half (51%) citing some kind of difficulty, from long waiting times (22%) to giving up after multiple failed attempts (9%).
In addition, 50% of savers who attempted to transfer a defined contribution pension were still required to complete paperwork, with more than a quarter (27%) having to complete multiple sets of forms. This is despite electronic transfers being widely recognised as much faster, more efficient and secure for consumers than traditional paper-based methods.
Slow, difficult transfers have been an issue for many years. In 2016 the Financial Conduct Authority (FCA) asked the pensions industry to speed up transfers for the benefit of savers and a number of working groups, like TRIG and STAR, were formed. However, recent data published by Origo Options, the pension transfer service, showed that five years after this process began transfer times are in fact slowing down.
PensionBee’s own data reveals a series of slow transfer offenders, with Mercer at an average of 46 days to transfer and NOW: Pensions (44 days) and Capita (40 days) not far behind.
PensionBee CEO, Romi Savova, comments: “Long and complex processes deter people from engaging with their pensions and switching when it may be in their best interests to do so. Low levels of digitisation exacerbate chronic under-saving because people don’t have the right tools and information to understand the importance of planning ahead for their financial future. Technology provides an opportunity for the industry to better engage savers, and it’s time for pensions to make their way into the 21st century with a simple, modern pension switch guarantee.”
Appendix
Table 1: Transfer difficulty
Source: PensionBee, July 2021. 428 respondents. Numbers have been rounded.
Table 2: Accessing support during the transfer process
Source: PensionBee, July 2021. 424 respondents. Numbers have been rounded.
Table 3: Transfer process
Source: PensionBee, July 2021. 429 respondents. Numbers have been rounded.
Table 4: Slowest providers for pension transfers
Source: PensionBee, July 2021.
