Retirees hoping to make use of the new pensions freedoms are being held up for weeks by admin hurdles, research has found.
Since April this year, anyone over the age of 55 has been able to take some – or even all – of their pension as a lump sum. The new rules wiped away old restrictions which only let retirees have a quarter of their savings at once. The change has proven hugely popular, with £1.3bn taken out of pensions in the first few months of the freedoms, according to the Association of British Insurers.
But nearly seven months on, many pension schemes have yet to adapt to the new system, so savers are having to switch their pension pot to a new provider that is able to offer flexible access to the cash.
But getting hold of the information to start transferring the pension is taking over a month at some providers. The slowest defined contribution scheme is NEST, which takes an average of five weeks to provide the requisite information. St James’s Place is also among the slowest, with an average 4.2 week wait.
The research is from Portal Financial, an at-retirement adviser which analysed 12,852 requests for information made on behalf of nearly 8,000 clients. It contacted 1,396 defined benefit and defined contribution pension schemes.
“Action is necessary and pension transfers should be as simple as changing bank accounts,” says Jamie Smith-Thompson of Portal Financial.