Pension transfer system ‘not fit for purpose’, industry report warns

“For too long, legacy providers have lagged in adopting innovations that improve saver engagement and outcomes.

“The FCA must look beyond headline statistics and examine why pension transfers so often stall.

“There are cases where providers flag ‘overseas investments’ while offering the same global tracker funds themselves, raising questions about whether these flags are being used to frustrate legitimate transfers and retain customer funds.”

Lisa Picardo, chief business officer UK at PensionBee, added: “Pensions belong to savers, not the Government or providers. Individuals carry the risk if their retirement savings fall short, so they should have real choice over how and where their money is invested.

“They must also be free to move providers easily, yet the transfer process still isn’t fit for purpose.

“As workplace schemes consolidate, and investment strategies converge and move towards private markets, it’s vital that savers can still vote with their feet when it comes to what may be the biggest and most consequential pot of money they’ll ever own.”

Tom Selby, director of public policy at AJ Bell, added: “With the development of the pensions environment at a pivotal crossroads, decisive policy action has never been so important.

“Government, regulators, and the pensions industry need to work together to tear down any existing barriers to support the government’s retail investing drive and turn Brits from savers into a nation of investors.

“Driving down transfers times across the market is essential, as is aligning the regulatory approach for retail and workplace pensions so we can deliver better outcomes for investors and support the UK’s retail investment ambitions.”