People wanting to transfer pensions are hit by massive delays, a campaign has said (Image: Getty)
People have just days to back a campaign which is aiming to get a change that would impact anyone with a private pension. A petition on the Parliament website is urging the government to change the rules around pension transfers – a process which has been described as being hit with massive bureaucratic delays due to the system.
PensionBee, a leading online retirement savings provider, is warning that this is the final opportunity for savers to add their names and ensure policymakers hear first-hand how slow pension transfers are holding people back from taking control of their retirement savings. The backing has soared to 16,573 signatures, forcing the Department for Work and Pensions to issue a response. There are just two days for people to sign up – if it reaches 100,000 it could spark a Commons debate.
The petition calls on 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 Yet we think some providers persist with outdated, paper-based processes.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.”
Now officials from the DWP have responded, saying it is in fact working to bring in changes and will issue consultations on this in the ‘coming months’. It said: “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.”
On the incoming changes it added: “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.”
Pensions Bee said: “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 full response and sign up to the petition click here.