State pensioners in the UK are confronted with significant delays in receiving their pension payments, with transfer times extending up to 24 days during the busy Christmas season. This increase in waiting times could lead to frustration for many pension savers as most will not see their funds until January 2024 at the earliest.
According to the analysis from the Retirement Fairness Index, the average completion time for pension transfers rises sharply in December, from an annual average of 18 days to a staggering 24 days. My Pension Expert’s data reveals that for pension pots valued under £40,000, the average transfer time is approximately 20.4 days, while those between £40,000 and £80,000 take around 18.5 days.
Lily Megson-Harvey, the policy director at My Pension Expert, noted that December places considerable pressure on household budgets. “People often seek clarity over their pensions during this time,” she stated. “However, our data shows that transfer times peak in the Christmas period, which can be a real source of frustration for savers.”
Megson-Harvey advised individuals planning to move or withdraw funds to engage with their providers as early as possible. She emphasized that greater transparency and accountability from pension providers could alleviate some of the pressures faced by consumers. “What matters is that people feel supported to make decisions with confidence,” she added. “Access to clear information and affordable advice can help savers remain in control and plan ahead, even when the system faces challenges.”
The issue of slow transfer times has drawn criticism from industry experts. Lisa Picardo, chief business officer for the UK at PensionBee, commented on the proposals from the Financial Conduct Authority (FCA) to introduce a mandatory response time of 10 working days for pension transfers. “These long-overdue steps will modernize the industry and ensure customers no longer suffer from outdated, paper-based processes,” she remarked.
Picardo pointed out that the pension industry has been marred by slow transfer times and inconsistent practices. She believes that the reforms set a clear expectation for consumers, allowing them to move their pensions efficiently and securely without unnecessary delays. “With mandated 10-day response times, ceding firms will need to enhance their operational efficiency, which is crucial to restoring consumer trust,” she said.
The introduction of digital signatures is another anticipated change that could expedite the transfer process. Picardo noted that the traditional requirement for a ‘wet signature’ has often caused stagnation in transfers. “The widespread adoption of digital signatures looks set to eliminate this long-standing issue,” she concluded.
As pension savers navigate the holiday season, the emphasis on timely and efficient transfers remains critical. With potential delays looming, it is essential for individuals to proactively communicate with their pension providers to ensure they are prepared for any changes in their financial situation.
