Switching to another pensions provider is much harder than it should be.
Pension savers are always encouraged to change pension provider in search of better performance or lower charges elsewhere. But how straightforward is it to switch your defined-contribution pension from one platform to another?
Not straightforward enough if your pension is with Hargreaves Lansdown: new research suggests the firm takes six times as long to manage pension transfers as the quickest providers.
The figures come from Origo, the company that runs the electronic system through which almost 700,000 pension transfers are managed each year. It says a Hargreaves Lansdown transfer takes an average of 30.5 days. The quickest provider in the survey, NFU Mutual takes 4.8 days.
To be fair to Hargreaves Lansdown, the survey doesn’t cover every pension provider in the market and only includes transfers that go through Origo. Still, the findings show that for all the talk of encouraging savers to be more proactive when it comes to managing their savings, the obstacles put up by pension providers that prevent them doing so are often significant.
Speeding up the pensions transfer process
There are some steps you can take to clear these hurdles more quickly. Before making a pension-transfer request, make sure you have all the paperwork and detail you need, rather than giving providers an excuse to delay while you dig out what’s required.
Arranging your transfer through an independent financial adviser can help you avoid unexpected trouble or at least save you a headache by outsourcing the administrative hassle to someone else. Taking advice on a transfer often makes sense in any case: you need to be confident you’re not giving up benefits that you won’t be able to match elsewhere, and that you’re making a good choice of a new pension provider.
Finally, if you are unhappy with the service you receive while transferring your pension, kick up a fuss. Although regulators keep promising to intervene in the pension transfer market, shaming providers into investing in systems that work better may be even more effective, particularly if you complain loudly and publicly through channels such as social media.
The bottom line is that you must not give up on transferring your pension if you’re convinced that doing so will result in you being better off in retirement.
The pensions industry has a vested interest in delay and obfuscation: providers do not want to lose your business. But the short-term pain of getting past the prevarication is worth it for the long-term gain of a better pension elsewhere.