PensionBee Urges UK Government and Regulators to Overhaul 'Broken' Pension Transfer System

PensionBee Calls for Urgent Reforms to UK Pension Transfers

PensionBee, a leading online pension provider, has issued a pressing call to the UK government and regulatory bodies, including the Department for Work and Pensions (DWP), the Financial Conduct Authority (FCA), and The Pensions Regulator (TPR), to undertake a comprehensive overhaul of the nation's pension transfer system. The company highlights that savers continue to experience significant delays when attempting to move their retirement funds, with some transfers reportedly taking months, and in extreme cases, even years, to complete.

The demand for modernization is detailed in PensionBee's latest report, 'Faster, Fairer, Digital: The Pension Transfer Reset,' launched on December 5, 2025. The report asserts that the current system 'routinely fails consumers,' leading to confusion and anxiety for individuals seeking to access or consolidate their pension savings. Lisa Picardo, Chief Business Officer UK at PensionBee, stated, 'In 2025, it's unacceptable that savers are waiting months, sometimes even years, just to move their own money.'

Addressing Systemic Delays and Inefficiencies

PensionBee attributes the persistent delays to outdated processes, reliance on paper forms, and what it describes as 'sludge tactics' employed by some providers to slow down transfers. The report also points to a 'two-tier system' within the industry, where firms regulated by the FCA typically complete digital transfers within days, while many trust-based schemes overseen by TPR lag significantly. This disparity, coupled with legacy IT systems and a lack of enforceable service standards, creates a 'lottery' for consumers.

Data from PensionBee's analysis of transfers to its platform in 2024 revealed an average transfer time of 22.4 days. While the ten quickest providers averaged 7.6 days, the ten slowest averaged 44.2 days. Notably, XPS Administration recorded an average transfer time of 66.4 days, with other significant delays observed from Railpen (56.9 days) and the Local Government Pension Scheme (59.4 days). In contrast, PensionBee itself consistently completes transfers in an average of 10 days.

Five Key Recommendations for Reform

To rectify these issues, PensionBee's 'Faster, Fairer, Digital: The Pension Transfer Reset' report outlines five critical reforms:

• Mandatory Digital Transfers: Implement compulsory digital transfers across all pension schemes, with an immediate focus on trust-based schemes.
• 10-Day Pension Switch Guarantee: Introduce a legally backed guarantee to ensure the majority of defined contribution pension transfers are completed within ten working days.
• Transparent Performance Data: Require providers to publish their transfer performance data, enhancing transparency and accountability.
• Reform of Scams Legislation: Amend existing scams legislation, specifically the Amber and Red Flag regime, which PensionBee argues is sometimes misapplied and used to delay legitimate transfers.
• Reduced Statutory Deadline: Decrease the statutory six-month deadline for transfers, which has remained unchanged for over 30 years and is deemed unsuitable for the digital era.

The company emphasizes that voluntary initiatives, such as STAR, have not achieved universal adoption or enforceable standards, necessitating government and regulatory intervention.

Public Support and Future Outlook

The call for reform has garnered public support, with over 6,500 people signing PensionBee's public petition for a 10-day Pension Switch Guarantee. The company warns that upcoming developments, including the rollout of Pensions Dashboards and changes to inheritance tax, are expected to trigger a surge in pension consolidations. Without immediate action, millions more savers could face avoidable transfer delays, further undermining confidence in the UK pension system.