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.’
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