There are two ways for pension providers to transfer a pension: electronically (fast) or manually (slow).
In recent years, many pension providers have incorporated electronic transfer into their process. This is the fastest method of transferring pensions, and typically takes up to two weeks.
However, some pension providers still rely on the old paper-based transfer process. This requires signed and verified documents to be posted back and forth between the customer, the old provider and the new lender that’s receiving the transfer. This process is slow and can take several months.
PensionBee is set up to receive transfers electronically. But the speed of your transfer will depend on the transfer method your old provider chooses to use: electronic (up to two weeks) or manual (up to several months).
Benefits of electronic transfer
Electronic transfers are much faster than the traditional method, saving weeks or months of waiting.
It’s more efficient because the process is less involved. There’s no paperwork to fill out, no inevitable chasing of the provider to find out what’s going on, and less waiting for documents to be received.
It’s a very safe method of transfer, as any money that’s transferred between lenders is tagged and traced so that the lenders know where it is at all times.
And it’s less costly - we estimate around £1 billion is lost each year by people having to transfer their pensions the old-fashioned way.
Why do some providers still use the old manual transfer method?
The technology is well-established and proven, and many providers have already successfully transitioned to electronic transfers to improve their customers’ experience. So why are some lagging behind?
We don’t know. But in our opinion, it’s because they choose to. It could be that they think customers will be less likely to move to a new provider if the transfer process is difficult. Or it could be because they want to delay transfers for as long as possible while they continue to earn their fee.
What we do know is that they’re not putting their customers first. And we think that’s inexcusable.
What can I do to speed up my transfer?
The only way that the paper providers are going to start using safe electronic transfers is if you complain to them directly. It’s your money, and you have the power as a policyholder to challenge their behaviour.
Encourage your provider to switch to electronic transfers:
- Tweet the provider’s corporate Twitter account asking why they refuse to use safe, electronic transfers to move your money
- Tell your former employer who put you in the scheme that you are now trapped in a paper transfer quagmire and it’s a nightmare to leave
- Expose the problem! Tell all your former and current colleagues that they’re also trapped in a scheme that could cost them months of precious time and money to try and leave – get them to write letters and tweet too.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
Last edited: 06-04-2024
