Slowest and fastest providers to release funds revealed

According to specialist retirement adviser My Pension Expert, Sanlam typically releases funds within 13 days of receiving the letter of authorisation, whereas the slowest providers can take up to 62 days longer.

The adviser has ranked what it calls the most consumer friendly firms in its latest Retirement Fairness index, which is based on its clients' experience.

The index compares the time it takes ceding providers to release funds to clients based on letters of authorisation and actual fund transfers.

It looked at funds received between April 1 2017 and June 30 2018, where a pension transfer had been completed.

This amounted to 2,124 cases with an average fund size of £47,456 producing an average annual income of £3,090.56 and a daily income of £8.47.

My Pension Expert warned delays in releasing funds could put people out of pocket.

In its experience Xafinity, now XPS Pensions Group, was the slowest provider to release funds, with an average delay of 62 days when compared with Sanlam.

The adviser calculated Xafinity's delays cost customers an average of £597.68.

But Dave Hodges, head of defined contribution at XPS, said the company was confident it was taking no longer than 20 days to release funds in the majority of cases.

He said: "The full process for an end to end retirement quote and disinvestment should take no longer than 20 days, we are fully satisfied we can and do meet this timeline in the majority of cases. Any additional time taken, i.e. delays, is normally due to essential missing information or delays by third parties.  

"We are dedicated to improving member outcomes and are supportive of what this research is trying to achieve in terms of raising standards."

He added: "More widely we think there are really big issues that need addressing such as protecting people from being scammed – we are at the leading edge in this area and will continue to do more to improve member outcomes."

My Pension Expert said it feared if industry attitudes did not change there was nothing stopping the delays from increasing further.

The adviser said it would work with experts to drive change in the sector and fight for consumers to be prioritised by ceding companies.  

Andrew Megson, executive chairman of MPE said: "The delays of ceding companies to release funds undermines consumer confidence. This is unacceptable. Why should people suffer financially because some ceding companies refuse to put consumers first?

"MPE refuse to accept that the industry can’t change. This is why we are working with experts to ensure consumers are always prioritised by the financial services industry. In such an uncertain environment, the least we can do is give consumers confidence in their retirement plan."

The providers were ranked in comparison with Sanlam. The cost element represents My Pension Expert's estimates of the cost to the consumer caused by the delay. 

The Pensions Trust, now called TPT Retirement Solutions, has disputed the findings and data used.

A spokesman for TPT Retirement Solutions said: "We simply don't recognise any of these numbers and believe this information is severely flawed – but we have not been given the opportunity to review the data or survey size on which it is based.

"We manage benefits for over 300,000 members and survey them via an independent third party - overall satisfaction including speed of service has recently scored over 90 per cent.

"We have very few members who purchase lifetime annuities at retirement and of course where a transfer is paid we will not know whether that individual has subsequently purchased a lifetime annuity. In the last quarter over 99 per cent of all payments were settled within 5 days of request."

Venilia Batista Amorim is a freelance writer for FTAdviser