Govt urged to legislate for 10-day pension provider transfer guarantee

PensionBee has called on the government to legislate for a 10-day pension provider transfer guarantee, after finding that switching pension provider took longer than other ‘essential’ services.

Its research found that just over a quarter (26 per cent) of savers found switching pension providers easy.

Savers felt switching pension provider was harder than other essential services, with 73 per cent saying changing home or contents insurance was easy and 69 per cent saying switching energy providers was easy.

PensionBee warned that difficulty in transferring drove lower engagement, as over a third (35 per cent) of respondents had never tried to change pension providers.

By comparison, 10 per cent of respondents had never tried to switch home or contents insurance, and energy providers.

PensionBee noted that many providers still used paper-based transfer processes, with the average switching time for paper-based transfers being 34.4 days compared to 12.5 days for electronic transfers.

Due to the transfer times being longer than other essential services, PensionBee called on the government to legislate a 10-day pension switch guarantee.

The online provider also found that 21 per cent of those surveyed were ‘very satisfied’ with their service from their pension provider, compared to 36 per cent for current account and mobile phone providers.

Commenting on the findings, PensionBee chief engagement officer, Clare Reilly, said: “While auto-enrolment has successfully brought millions of people into the pensions system, archaic pensions legislation keeps them stuck in 1993.

“Pensions urgently need basic consumer switching rights, like we see in other essential services and utilities. These switching rights will raise consumer power, effective competition, and help drive better engagement with pension saving.

“We call upon the government to legislate a 10-day pension switch guarantee.

“At PensionBee, we’ve seen firsthand that customers appreciate simplicity and responsive customer service, qualities enabled by digital technology. In this day and age, no consumer should be put off switching providers due to lengthy transfer processes, paper and post.

“The technology to simplify pensions exists, and all providers must use it, giving consumers the ability to select the best plan for them so that everyone can look forward to a happy retirement.”

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