Recent research highlights ongoing confusion among UK savers regarding pension transfers.
- Only 29% of people with pensions made a transfer in the last five years.
- Many Britons avoid pension transfers due to complex processes and potential fees.
- A significant portion of respondents prefer convenience over performance in pension management.
- There is a call for government action to simplify and expedite the transfer process.
Research commissioned by a leading at-retirement adviser reveals widespread confusion and hesitation among UK savers regarding pension transfers. An independent survey of 2,000 UK adults with pensions found that a mere 29% had completed a pension transfer in the past five years. This statistic suggests a substantial reluctance to engage in transferring pensions despite potential benefits.
The survey indicates that 58% of participants would be willing to consider a pension transfer if the process were less complicated. This desire for simplification reflects the challenges many face with the current system, which is described as slow, complicated, and opaque. The survey further reveals that 43% of respondents value convenience over performance when managing their pensions, pointing to a preference for ease of process over exploring potentially more fruitful options.
Additionally, the survey found that 30% of individuals are concerned about potential exit charges imposed by their current pension provider should they attempt a transfer. These financial penalties are a significant deterrent, leading many to remain with their current providers despite possible advantages elsewhere.
Data from the My Pension Expert’s annual Retirement Fairness Index emphasizes the inefficiency of the current system, noting that it takes around 29 days for ceding companies to transfer funds to a new provider. This protracted timeline adds to the frustration and complexity experienced by consumers.
Lily Megson, Policy Director at My Pension Expert, critiques the system, stating, “The UK’s pension transfers system is warped. This research demonstrates that UK consumers are deterred from making pension transfers by the slow, complicated and opaque processes involved, as well as concerns about the fees that could be charged.” Her comments underscore the urgency for reform, advocating for greater transparency and expedience in the transfer process. Megson calls on the government to prioritize this issue, despite other ongoing pension-related reforms, to restore consumer trust and facilitate improved pension management.
The need for reform in the pension transfer process is evident, and action is required to ensure UK savers can easily optimize their retirement funds.
