New research highlights confusion among Britons regarding pension transfers, impacting many.
- Only 29% of pension holders have transferred their pension in the past five years.
- A significant 58% could consider transfers if the process were simplified.
- Convenience is valued over performance by 43% of respondents when managing pensions.
- 30% fear exit fees from their current providers during transfers.
New research has cast a revealing light on the confusion surrounding pension transfers among UK savers. The findings from a survey, conducted by a leading at-retirement adviser, indicate concerning trends impacting many Britons’ financial decisions.
A mere 29% of those surveyed have made a pension transfer in the past five years, which points to widespread apprehension or dissatisfaction with the current process. This reticence can be attributed to the complexity and perceived opaqueness in the pension transfer system, which requires urgent reform to instil confidence among savers.
Interestingly, the study shows that 58% of respondents would contemplate a pension transfer if the process became more straightforward. The existing system’s convoluted nature appears to be a significant barrier to more frequent transfers, suggesting a potential area for regulatory improvement.
Moreover, when it comes to managing their pensions, 43% of participants prioritise convenience over the actual performance of their investments. This preference may reflect a broader trend towards easy management over financial optimisation, possibly due to the cumbersome process currently in place.
Additionally, 30% of those surveyed express concerns about exit charges from their pension providers. This fear of incurring unexpected fees further discourages people from transferring their pensions, limiting their financial flexibility and potentially hindering better pension performance over time.
Lily Megson, Policy Director at My Pension Expert, commented on the findings, describing the UK’s pension transfers system as “warped”. She stated, “This research demonstrates that UK consumers are deterred from making pension transfers by the slow, complicated and opaque processes involved, as well as concerns about the fees that could be charged.”
The study underscores a critical need for reform, emphasising the importance of transparency and efficiency in the pension transfer process. Without significant changes, pensions may not perform optimally for millions, leaving them with suboptimal financial arrangements.
A comprehensive overhaul of the pension transfer system is essential to restore trust and enhance efficiency for UK savers.
