Pension transfer times slow amid record transfer volumes

The average pension transfer times have slowed over the past quarter, according to the latest data from the Origio Transfer Index (OTI), with both overall and simple transfers taking an extra day compared to Q1 2021 figures.

The data revealed that simple transfers made through the Origo Transfer Service for the year ending 30 June 2021 had an average transfer time across OTI participants of 10.2 days, compared to 9.2 in Q1 2021.

The average transfer time increased to 12.5 days for overall transfers, compared to 11.7 days in Q1 2021.

Origo attributed the increase in turnaround times to the rise in transfer volumes seen in recent months, with the latest OTI data also revealing that a record £40bn in pension savings was transferred through Origo for the year to end of June.

The provider also pointed out that nearly half (47.5 per cent) of these transfers were "small pots" valued at £10,000 or under, whilst a further 15 per cent were valued at under £1,000.

Commenting on the findings, Origo CEO, Anthony Rafferty, noted that concerns have been raised recently around the growing number of small pots being generated within pensions schemes, in particular through auto-enrolment, as workers change employers.

He continued: “This is an issue which will continue to grow and cause issues around scattered pension holdings and value for money, as well as sub-optimal outcomes for consumers at retirement.

“The pensions dashboard will help individuals to identify and locate their various pots but may exacerbate issues relating to small pots.

“If the industry is to help consumers efficiently consolidate the growing volume of small pots into meaningful holdings, more automation will be required to reduce the labour overheads of pensions companies, which are the main costs associated with transfers.”

Despite the broader trends, Origo also highlighted that a number of providers have improved their yearly average performance during this period, including Elevate, Fidelity, Forester Life, Hargreaves Lansdown, Legal and General, LV=, NFU Mutual, Parmenion, Pheonix Group and Zurich Group.

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