Slow And Expensive Pension Firms Named And Shamed

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Pension providers are failing to keep their promises over how long they take to move money between each other.

The worst providers can take up to 52 days, while the best manage to switch funds between pensions in just 13 days, says consolidator PensionBee.

The firm studied several aspects of pension transfers between direct contribution schemes, while praising the best but naming and shaming the worst firms.

The study looks at nearly 7,300 transfers from other pension providers to PensionBee’s platform, analysing transfer times, annual charges and exit fees from 35 British pension providers.

PensionBee has not published how many transfers were handled for each provider, but confirmed a minimum of five cases were looked at for each.

Slowest pension transfers

The slowest average transfers were from XPS Pensions Group – formerly Xafinity – timed at 52 days.

Next was Now: Pensions, scoring 45 days and then Mercer on 44 days.

Among the best with the quickest average transfers were Aviva, Scottish Widows, B&CE, Canada Life and Phoenix Life, who all posted transfers within an average 14 days.

PensionBee chief executive Romi Savova said: “Things are definitely changing for the better in the pension industry, but a lot of work remains to improve switching times and completely eliminate all forms of exit fees.

“There are a handful of providers who continue to treat customers unfairly and we are determined to stay at the forefront of customers’ rights to have better pensions and ultimately a decent retirement.”

Most expensive charges

Now: Pensions was dubbed the most expensive with an average annual charge of 62%. The next most expensive was Zurich, with an average annual charge of 5.9%.

Cheapest was Legal & General, with an average annual charge of 0.3%. Fidelity, BC&E, Standard Life and Aviva all had average annual charges ranging between 0.4% and 0.8%.

Phoenix Life charged the highest exit fees as a proportion of a pension fund at 96%. The highest charge paid by a retirement saver was £12,245 as 13.5% of the fund value.

PensionBee also claims the Phoenix exit fees escape regulation as they are considered ‘market value reductions’ on with-profit pensions, which have separate rules applied.

Read the full PensionBee report

Download the Free Pension Transfer Guide

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