Providers’ pension switching times have improved over the past year, now taking on average of 8.8 days to complete, half a day less than last year.
Fintech company Origo today (April 22) published data revealing how long pension providers took to process a pension switching request on average for the 12 months to March 31, 2020.
It found that overall switching times have dropped by half a day on average, with simpler transfers taking a week to complete, down from 7.9 days the previous year.
According to Origo, simple transfers are those where the ceding provider has complete control over the entire ceding process, therefore they are not complicated by external factors.
For the year until March 31, the Origo Transfer Service switched a total of £37.2bn worth of pension funds, with an average value of £47,609.
According to the latest data, NFU Mutual was the fastest provider taking 4.9 days on a normal switch and 4.6 days on a simple switch.
It was followed by Canada Life which took 5.6 days and 5 days respectively.
The worst performing provider was Hargreaves Lansdown which took 30.2 days on average and 27.4 days on a less complicated switch.
Nathan Long, senior analyst at Hargreaves Lansdown, said: “Hargreaves Lansdown is committed to improving consumers’ transfer experience, both by enhancing our internal process and though collaborative work with industry partners.
“We continue to play a leading role in the Star initiative; we’re also committed to full transparency, which is why we give permission to Origo for our data to be published.
“We encourage all firms involved in transfers to also disclose their performance data and to work with Star for the benefit of all involved.”
Launched in October 2018, Star is a partnership between Criterion and TeX is working on delivering the Transfers and Re-registration Industry Group framework, which was published in July and proposes a 14-day maximum limit for cash transactions and 15 days for occupational scheme transfers.
Out of the 26 firms which provided data through the Origo transfer service, 13 took fewer than 10 days to process a request.
Pension switching involves moving a defined contribution pot from one provider to the next and is different from pension transfers, which see defined benefit pensions being moved into DC schemes.
Anthony Rafferty, managing director at Origo, said: “The aim is to help drive up transparency in the industry as well as demonstrating that the long timeframes being headlined – over 50 days in some cases – were far from indicative of the industry’s performance.
“The FCA has transfer times firmly in its spotlight as does minister for pensions and financial inclusion, Guy Opperman, who has urged providers to be transparent with their transfer times and to work to lower them to provide a better service for consumers.
“The average transfer times being achieved by participants in the Origo Transfer Index overall is to be commended and is good news for individuals wishing to safely and quickly transfer their assets.”