Consumers with pension transfer complaints could have a wait of at least six months at the Financial Ombudsman Service, FTAdviser has learned.
It comes as the ombudsman confirmed it has endured its busiest year in the last half a decade.
A source external to the service, and who wished to remain anonymous, said they had been informed by the Fos it would be a six-month wait before pension transfer complaints are allocated to an adjudicator.
The source said the wait times were specifically related to defined benefit transfer cases and warned once a complaint was allocated it could take "many more" months before an initial decision was reached.
A spokesperson for the Financial Ombudsman Service said: "Last year was our busiest year for five years but we’re working hard to get people answers on their cases as quickly as possible.
"We will always look to prioritise complaints when we know the consumer is in vulnerable circumstances."
This year has seen warnings of a turbulent defined benefit transfer advice market crystallise, with professional indemnity insurers stepping away from the sector amid a backdrop of rising claims numbers and an increase to the ombudsman's compensation limit in April.
Pension transfer complaints at the service were up 44 per cent in 2018/19, compared with the previous year, according to a freedom of information request by consultancy firm Duff & Phelps, published in October.
The Fos received 798 complaints relating to pension transfers during 2018/19, of which 39 per cent were upheld.
In 2017/18, the Ombudsman received 553 complaints, with a 30 per cent uphold rate.
This comes after data from the Financial Conduct Authority out in June showed some 69 per cent of transfer clients have been advised to transfer out of their DB pension since the introduction of pension freedoms in 2015.
This was not the first time concerns have been raised that the ombudsman has been struggling to meet time and cost targets since it underwent a restructure in 2016 in a bid to future-proof the service against the loss of PPI claims.
According to the Fos’ annual report and accounts for the year ended March 31, 2019, published in July, the service had experienced year-long delays when resolving certain cases after facing challenges from industry players.
Last month a whistleblower at the Fos told FTAdviser the overall cost of dealing with what is labeled a general casework complaint, rather than a mass claim, has increased 84 per cent over the past five years.
In data seen by Financial Adviser the direct cost of dealing with a general casework complaint rose 145 per cent from £334 in 2015/16 to £819 in the first quarter of 2019/20.
The direct cost of dealing with a mass claim complaint rose by 44 per cent from £260 in 2015/16 to £374 in Q1 of this financial year.
When shared costs were added, such as building, IT and HR costs, the overall cost of dealing with a general casework complaint rose by 84 per cent from £639 in 2015/16 to £1,174 in the first quarter of 2019/20.
rachel.mortimer@ft.com
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