Annuity delays revealedAnnuity transfers can take a month or more
21 June 2009
Research published by IFA Hargreaves Lansdown shows that some firms take well over a month to transfer pension funds into an annuity. Delays of 30 days were common, while some transfers took over two months.
Partnership Assurance looked at 7,500 cases over a 4 year period and identified how long firms took to transfer clients' money. Windsor Life was worst, with a 99 day average, but banks such as NatWest and HSBC were revealed as slow performers, with average times of 59 days and 57 days respectively. Aegon, Axa, Friends Provident, Legal & General, Prudential, Scottish Life and Scottish Widows all took 30 days or longer.
'These companies are taking a commercial decision to eke a little more profit out of their loyal customers.' said Hargreaves Lansdown pensions analyst Nigel Callaghan. 'This flies in the face of treating customers fairly, smacks of commercial cynicism and simply cannot continue.'
New initiative promises faster transfers
Few would dispute that annuity transfers should be speeded up. A new initiative, supported by the Association of British Insurers (ABI) and launched in December 2008 promises to do just that. The Options scheme brings providers together in an online system aimed at a simplified and more rapid transfer process. According to ABI figures for 2009, average transfer times have already fallen from 31 days to 8 days. 14 providers have already joined the new system. Commenting on these figures an ABI spokesman said, 'This is very good news for annuity customers, and a real success for the pensions industry...The options initiative has got off to a great start.'
Which? Money when you need it
You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.
Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.
Or for money-saving tips, and news of how what's going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast
For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.