People with pensions are currently left waiting for months and even years leaving their money ‘trapped’, campaigners say
People wanting to transfer pensions are hit by massive delays, a campaign has said(Image: Getty Images)
Britons have just days remaining to support a campaign seeking changes that could affect everyone holding a private pension. A petition hosted on the Parliament website is calling on the Government to reform the regulations surrounding pension transfers – a procedure that has been plagued by significant administrative hold-ups within the current system.
PensionBee, a prominent online pension provider, has cautioned that this represents the last chance for savers to add their signatures and ensure decision-makers understand directly how sluggish pension transfers are preventing individuals from managing their retirement funds effectively. Support has surged to 16,573 signatures, compelling the Department for Work and Pensions to provide a formal response.
With only two days left for people to register their backing, reaching 100,000 signatures could trigger a debate in the Commons.
The petition urges the DWP to: “Legislate to mandate offer of electronic pension transfers and higher standards. You can switch banks in a week and send money instantly, so why should pension transfers take months and be so stressful? Only the government has the power to change this, so we’re asking them to take action and set clear, enforceable standards for faster, electronic pension transfers.
“63% of savers believe delays in pension transfers hinder effective retirement planning. Yet we think some providers persist with outdated, paper-based processes. At best, we think this may cause stress and confusion. At worst, we think it may deter people from moving their money, trapping them in poor-value, or unsuitable funds.”
“Some providers already offer secure, electronic transfers. We think it’s time to mandate this across the industry for fairer, efficient retirement savings.”
Officials from the DWP have now responded, confirming they are working to introduce changes and will launch consultations in the ‘coming months’. They stated: “The Government recognises the importance of efficiency in the pension transfers system and is considering how to improve the pension transfer process while maintaining strong member protection.
“The Government’s approach is guided by two objectives, supporting efficient transfers, and crucially, ensuring strong member protections, not least against scams. We acknowledge the calls for faster transfers, and we are exploring operational improvements to streamline processes, including the use of electronic processes which can drive real improvements.
“Changes driven by mandation across the market, would however, require changes to Primary legislation. We would also need to be satisfied that any changes do not weaken existing member protections or present a heightened risk of pensions fraud.”
Regarding the forthcoming changes, the Government stated: “The Government has been working with the pensions industry to consider changes that seek to provide a smoother transfer process and proactively respond to any developing risks. DWP is planning to consult on the outcome of this work in the coming months.”
PensionBee commented: “Despite the UK’s pensions industry becoming increasingly digital, many savers still face transfer times stretching into multiple weeks, months or even years. PensionBee’s research has consistently found that long delays remain a major source of frustration, creating uncertainty, stress and disengagement at a time when people should feel empowered to manage their money.
“A 10-day Pension Switch Guarantee would introduce a clear, time-bound standard for straight-forward pension transfers, helping to modernise the system and deliver a better experience for consumers.
“PensionBee is calling on savers, industry stakeholders and policymakers to work together to remove unnecessary friction from pension transfers and help ensure the system keeps pace with consumer expectations.”
To view the complete response and add your name to the petition, click here.