A recent study by online pension provider PensionBee has found that convoluted processes and putting people off switching pension providers.
The study discovered that only 26% of consumers found switching their pension provider simple, compared to 73% when it related to home or contents insurance and 69% for energy providers.
A key finding in the study was that consumers engaged less with pension switching when there was difficulty transferring drives. This was detailed by 35% of respondents who reported never having even attempted to try and change pension providers. This is in comparison to 10% of respondents when it came to both home or contents insurance and energy providers.
While pensions can be transferred electronically, many pension providers still use paper-based transfer processes. Currently, the average switching time for electronic pension transfers is 12.5 days, compared to 34.4 days for paper-based providers – a finding that is higher than the average transfer times of other essential services.
The survey found that only 1 in 5 respondents – 21% – said they felt very satisfied with the service from their pension provider, compared to 36% for current account and mobile phone providers.
PensionBee chief engagement officer Clare Reilly said, “While Auto-Enrolment has successfully brought millions of people into the pensions system, archaic pensions legislation keeps them stuck in 1993. Pensions urgently need basic consumer switching rights, like we see in other essential services and utilities. These switching rights will raise consumer power, effective competition, and help drive better engagement with pension saving. We call upon the government to legislate a 10-day pension switch guarantee.
“At PensionBee, we’ve seen firsthand that customers appreciate simplicity and responsive customer service, qualities enabled by digital technology. In this day and age, no consumer should be put off switching providers due to lengthy transfer processes, paper and post. The technology to simplify pensions exists, and all providers must use it, giving consumers the ability to select the best plan for them so that everyone can look forward to a happy retirement.”
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