This week the DWP published the snappily titled Review of the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 (SI 2021/1237),  i.e. the results of their review to see if the rule brought in to prevent pensions scams is bringing in major delays to pensions transfers. 

Conclusion from the DWP: only 1% of transfers are flagged so everything is fine. 

So my question is this.

If scam prevention checks aren’t making pensions transfers even slower then what is? 

Because something is.

ORIGO data

Let’s look at some facts. ORIGO publish data on the performance of many of the biggest users of their service.  This is very useful as ORIGO are by far the dominant player when it comes to pensions transfers.  (ALTUS mainly play in the ISA/GIA and platform world.) Those firms included are a bit of a who’s who of the big pensions provider world so are I believe indicative of the industry as a whole.

You can look it up at Origo | Origo Transfer Index  and the picture is clear.  Transfer times are getting worse. 

For this article I am using the figure for 1 Jan 2019 to 31 Dec 2019 and comparing it to the most recent of 1 April 2022 to 31March 2023. 

I used 2019 as a base mark as it’s the last set of data before Covid hit.  2020 was clearly impacted by everybody having to work out how to run financial service companies from the kitchen table at 2 day’s notice.  But by ’22 we should be past all that so you would expect the numbers to be broadly comparable, right?  Wrong.

The overall average time has gone from 8.7 days to 13.7.  So on average 5 days, or a working week longer. 

The average for “simpler transfers” has gone from 7.9 to 11.7 days. So 3.8 days worse. 

This is what I will politely call “a poor show”.

Oh and look at STAR

For those not in the know, the STAR initiative was the industry’s answer to the FCA looking at transfer times and making tutting noises a few years ago. The idea is that firms are independently accredited against agreed service standards on transfers between pensions, ISAs and the like.  A lot of meetings, a LOT,  were had to decide the exact criteria but the idea is pretty simple. 

But looking at the accreditations so far is not a great picture.  See for yourself: Accreditation Personal Pension, SIPP and SSAS – STAR (joinstar.co.uk)

Titans of the pensions industry [heavy sarcasm] Seven Investment Management and Wealthtime are the only firms to get a gold rating.  A smattering of firms have silver or bronze ratings and a lot of firms have not even submitted for a rating.  I seriously doubt anybody who would have got a gold rating would have declined to submit so make of that what you will. 

Oh, and if you look at the occupational sector it’s not even that good.  Nobody has gold.  Not one single firm. 

So not good then.

Indeed, not really.  STAR suggests very few firms are getting transfers right and the ORIGO data suggests it’s getting worse. 

In the next blog I will makes some suggestions as to what the issues are.  And to be fair to the DWP, it’s not just scams rules.