The report found that 17% of financial advisers had waited over a year for a pension transfer, while only a fifth had never experienced a delay of more than three months.
The company is calling for a 10-day Pension Switch Guarantee, similar to the guarantee that consumers receive when switching their current accounts.
Lisa Picardo, chief business officer UK at PensionBee, said: “Swift switching isn’t a ‘nice-to-have’ – it should be a basic right.
“Delays are harming consumers and undermining trust in our industry. The Government and regulators must now step in and level the playing field, reshaping the pension transfer system that so desperately needs modernisation. That means primary legislation. And above all, that means putting the interests of consumers first.”
A Switch in Time
The company released the first of a three-part campaign series, entitled ‘A Switch in Time’, looking at the state of the pension transfer market.
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The report highlighted a number of long-running delays, with one adviser reporting a customer waiting over 1,000 days for a transfer to complete. PensionBee said firms causing these “unreasonable delays” are potentially in breach of the Financial Conduct Authority’s (FCA’s) Consumer Duty – causing harm to consumers by preventing them from accessing better products and achieving good outcomes.
The report also reveals that some firms are achieving switches in fewer than 10 days, with PensionBee saying this is proof that swift transfers are possible.
Calls for reform
The report also called for a reform of several parts of the regulatory process on switching, including the Amber and Red Flag Scam Prevention process, which was implemented in 2021 to try to prevent pension scammers from accessing consumer pensions.
The flagging process allows transfers to be prevented or paused while the member takes guidance about the possibility of scams, but PensionBee said there is “widespread misuse that is creating unnecessary delays”.
It also urges the FCA, the Pensions Regulator and the Government to legislate for a 10-day Pension Switch Guarantee, supported by binding service standards, mandatory transparency, and penalties for non-compliance.
