The average pension transfer time increased by 31 per cent between 2020 and 2022, rising from an average of 10.7 days to 14 days, analysis from PensionBee has revealed.

The analysis of Origo’s Pension Transfer Index showed that the vast majority of pension providers included have increased the time it takes to process transfer requests over the past two years.

In particular, it pointed out that The People’s Pension’s average transfer times doubled from 2020 to 2022 to 39.5 days, while LV recorded an average transfer time of 36 days and Nest achieved an average transfer time of 21.8 days in 2022.

However, PensionBee acknowledged that, by partipating in the Origo, providers display a commitment to transparency and the eventual improvement of their transfer time.

In contrast, it noted that a large number of providers and third-party administrators choose not to participate in electronic pension transfers or publicly disclose their transfer times, in turn showing limited engagement in the industry’s efforts to improve transfer efficiency for consumers.

Indeed, PensionBee’s data showed that providers that chose not to join Origo or do not process transfers electronically, such as large pension administrators, operate with "extremely lengthy transfer times".

In particular, the data showed that XPS Administration recorded an "alarming" average transfer time to PensionBee of 57 days in 2022, while Mercer took an average of 33 days, Capita 32 days and WTW took 26 days.

The provider's data showed that, in contast, PensionBee had "consistently" taken an average of 10 days to complete a pension transfer request over the same period, in line with its proposed ‘Pension Switch Guarantee’.

PensionBee also previously raised concerns that several pension providers could be abusing new pension legislation to block or delay consumers from moving their pensions, prompting The Pensions Regulator and the Department for Work and Pensions to share updated guidance on the issue, although concerns around the issue have since persisted.

Commenting on the latest findings, PensionBee director of public affairs, Becky O’Connor, stated: “It’s very concerning to see a sharp rise in pension transfer times.

"This latest data proves just how crucial it is to move away from self-regulation within the pensions industry and instead implement a ‘10-day Pension Switch Guarantee’, a time frame the Financial Ombudsman Service is already independently enforcing.

“This is essential to help restore confidence and trust in the pension system, allowing consumers to take control of their financial future and plan ahead for a happy retirement.

“Customers deserve to have an effective pension transfer process and the ability to voice complaints to the Ombudsman, giving them the same switching rights as is seen in other markets.”

Commenting in response, XPS Administration operations director, Gary Davies, said: “The regulations which came into force in 2021 are about protecting members from the ever-increasing prevalence of scams, which led to increasing timescales for transfers.

"Under the regulations, many transfers require a call with MoneyHelper before they can be paid, which can delay the process.

"We are actively working with government and industry partners, including providing regular data on our experiences and participating in working groups, to seek a change in the regulations that would make routine transfers operate more smoothly.

"Until those amendments are made, we will continue to abide by the regulations as they are written”

A Mercer spokesperson added: “As a pension scheme administrator, Mercer requires information and instructions from various third parties (such as the scheme trustees, actuaries, insurers, member financial advisors) to carry out a number of its services, including transfers.

"On rare occasions there can be delays receiving this information but, in all circumstances, Mercer outlines its processes to members and points to where they are at within any process to ensure member expectations are managed accordingly.”

People’s Partnership, provider of The People’s Pension, director of customer services, Kevin Martin, commented said: “The issue of transfer times is one we take incredibly seriously and have worked very hard on to improve.

"Not only have we recruited more specialist staff but we have invested in technology, which have both significantly improved the transfer journey for our members. We expect to see continued improvement in our transfer times throughout this year.

“This has been an industry-wide issue that has been caused, in no small part, by the introduction of the red flag system, which is a necessary safeguard against pension scams.”

WTW and Capita have been contacted by Pensions Age for comment.

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