Britons ‘miss out’ on larger returns on pensions on account of ‘lengthy’ switch delay

Britons are ready a mean of 1 month to finish a switch of their pension funds between suppliers, a brand new report has discovered.

However, delays from ceding firms – pension scheme members’ current suppliers – transferring cash to an alternate supplier will be demanding and “financially detrimental”, Lily Megson, coverage director at impartial retirement advisor My Pension Expert has stated.

Ms Megson stated: “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.”

Data from over 3,950 pension transfers within the final monetary yr discovered folks needed to wait 29 days on common for the method to finish.

Within this dataset, prospects with some pension suppliers may look forward to something between 120 days on common right down to 18 days relying on which agency their pensions pots have been with.

Ms Megson stated: “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.”

According to the analysis, Prudential (a mean of 18 days per switch), Clerical Medical (22 days), Reassure (22 days), Sun Life Financial of Canada (23 days), Standard Life (23 days) and Scottish Widows (24 days) have been the quickest of the ceding firms when it got here to transferring their prospects’ funds to a brand new supplier within the final monetary yr.

However, with some corporations making Britons wait between 58 and 120 days, Mr Megson stated the switch course of is just too usually “slow and opaque”, leaving prospects questioning the place their funds are and why suppliers are taking a lot time to switch them throughout.

Ms Megson continued: “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 an suggested retirement revenue specialist, based in 2010.

The agency specialises in offering impartial recommendation to UK customers about their pension plans and is at present working with the Government and trade our bodies to drive the next stage of transparency inside the sector.