Savers have to wait an average of 29 days for ceding companies to transfer their pension funds to a new provider, analysis from My Pension Expert has found, raising concerns over the “lengthy delays” facing consumers.

The analysis, based on data from over 3,950 pension transfers in the 2022/23 financial year, found that some customers had to wait much longer than others depending on which firm their pensions pots were with.

In particular, the research found that Prudential was the quickest of the ceding companies when it came to transferring their customers’ funds to a new provider in the last financial year, at an average of 18 days per transfer, followed by Clerical Medical (22 days), Reassure (22 days), Sun Life Financial of Canada (23 days), Standard Life (23 days) and Scottish Widows (24 days).

In contrast, XPS Administration was found to take the longest average time to transfer funds at 120 days, followed by DHL Pension Department (65 days), WTW (62 days), Nest (60 days), The People’s Pension (59 days) and Scottish Friendly (58 days).

My Pension Expert argued that delays when transferring money to an alternative provider can be stressful and financially detrimental for consumers, warning that savers could miss out on better returns as they wait for funds to move between providers.

In addition to this, it pointed out that some savers are reliant on their pension as their only source of income, warning that having these funds tied up in a pending transfer can leave them financially exposed.

Given this, it stressed the need for the government and industry bodies to work together to drive a higher level of transparency within the sector and, wherever possible, shorten ceding delays.

My Pension Expert policy director, Lily 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.

“The process is too often slow and opaque, leaving the customer wondering where their funds are and why providers are taking so much time to transfer them across.

"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."

However, providers identified within the results explained that recent anti-scam regulations have led to an increase in transfer timescales, stressing the importance of protecting savers from scams.

Broader concerns that some of the findings may be "misleading" have also been raised, with particular concerns highlighted over the sample size.

MyPensionExpert's analysis was based on 10 transfers for XPS Administration, 15 transfers for DHL Pension Department, 28 transfers for WTW, 32 transfers for Scottish Friendly, 43 transfers for The People's Pension and 58 transfers for Nest.

Commenting on the results, a spokesperson for People’s Partnership, provider of The People’s Pension, said: “It’s totally misleading to say that our average transfer time stands at an average of 59 days.

"This data is based on a sample size of 43 people, compared with the tens of thousands of transfers we process each year. It also includes the time taken for a member or receiving scheme to provide full information on the requirements and details needed for us to comply with regulations and process the transfer.

"It’s not possible to start or process a transfer without this information, which is required for consumer protection.

“The industry-recognised transfer figures show that our transfer times for last month stand at 18 days. We continually work to reduce these times.”

Also commenting in response to the results, a spokesperson for XPS Pensions Group said: “We take our obligations to our members seriously.

"Throughout the pension transfer process, our primary focus is on protecting scheme members from losing their pension to a potential scam, and we must balance our ambition to process transfers in a timely manner with this need to protect members.

“In 2021, anti-scam regulations came into force which led to increasing timescales for transfers. Under the new regulations, many transfers require a call with MoneyHelper before they can be paid, which can delay the process.

"Our processing time, in addition to the MoneyHelper call, is averaging around 17 days. However, the average time taken for scheme members to arrange the MoneyHelper appointment, and for the member to return the proof that the call has taken place, was around 80 days over 2022 and 2023.

“Our average transfer turnaround time so far in 2023 has shown an improvement of over 12 per cent since 2022, and we are continuing our efforts to decrease timescales for transfers. We are actively working with government and industry partners to seek a change in the regulations that would make routine transfers operate more smoothly.

"We are also a member of the STAR initiative, which is focused on improving the member experience. Until amendments are made, we will continue to abide by the regulations as they are written.”

A spokesperson for Nest added: “At Nest, we’re always looking at ways to improve our transfer process to ensure it is efficient, easy to use, and robust. Our average transfer time is 21 days.

“New regulations, which came into force in December 2021, require additional checks to be undertaken when completing a pension transfer. This is an important safeguard to help protect people and their retirement savings from pension scams.”

Adding to this, a WTW spokesperson said: “We are committed to delivering the highest standards of service to occupational pension scheme members and policy holders.

"We receive thousands of transfer requests every year and the majority of these are transfers from complex legacy defined benefit (DB) or mixed DB/defined contribution (DC) trust-based pensions that are more complicated and time intensive to transfer, when compared to contract-based DC scheme transfers.

“We are also committed to making robust efforts to protect members from pension scams and other nefarious attempts to cheat them out of their pension savings.

"Legislation and regulator guidance requires due diligence of the company or investment vehicle that will be receiving transferred funds and often checks to ensure the member has received appropriate financial advice, which can add time, but is an important part of the transfer process.

“We are constantly striving to enhance and improve our service and, as such, WTW has helped to develop and support new open standard technology for electronic transfers, known as ViaNova transfers.

"We are already using this technology to speed up the more straight forward pension transfer cases.”

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