Pensions  

Pension switching times worsen slightly

Pension switching times worsen slightly

Providers’ pension switching times have slightly deteriorated over the past year, with switches now taking an average of 10.7 days to complete.

Data from Origo published last week (January 28) showed transfers in the year to Q4 2020 took 0.7 days longer than in the year to Q3, while simpler transfers took on average 8.1 calendar days to complete, up from 7.6 days in the previous period.

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 December 31, the Origo Transfer Service switched a total of £33bn worth of pension funds for 133 different financial services firms, with an average ceding time of 11.9 days.

The annual data also showed that 64 per cent of transfers were ceded in under 8 days, and some 7 per cent were carried out on the same day, up from 5.2 per cent in 2019.

Anthony Rafferty, chief executive officer at Origo, said: “While there has been a marginal dip in transfer times this quarter, under a day for both sets of figures, the average transfer time remains firmly under two weeks. 

“It is important to note that transfers through Origo’s Transfer service are measured in calendar days not working days.

“It is encouraging also, to see there has been an increased number of intra-day transfers. This represents nearly £2.3bn transferred within a single day and reflects best use of technology within the industry.”

According to the latest data, NFU Mutual was the fastest provider taking 6.4 days on a normal switch and 4.5  days on a simple switch.

It was followed by Canada Life which took 7.2 days and 5.6 days respectively.

Out of the 26 firms which provided data through the Origo transfer service, 10 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.

amy.austin@ft.com

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