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The Department for Work and Pensions’ (DWP) must put a stop to pensions transfer delays, Quilter has warned.
A freedom of information (FOI) request from the firm revealed four in five transfers have been halted for an unknown or potentially low-risk reason.
Last month marked three years since the implementation of the DWP’s pension transfer regulations.
New FOI data from the Money and Pensions Service (MaPS), gathered by Quilter and spanning the full three-year period, reveals that despite persistent calls from industry for improvements, major issues continue to plague the regulations.
Quilter said it is positive that thousands of people have been saved from fraudsters since the introduction of the regulations in November 2021.
However, it adds the huge number of pension transfers that have been needlessly interrupted, and the knock-on impact this has had on savers greatly clouds its success.
The industry has repeatedly called for legislative change to prevent these unnecessary delays in pension transfers, yet the DWP has taken little action.
MaPS said this has resulted in 27,900, or four in five, out of a total 33,917 amber flags being raised for either an unknown reason or for a potentially low-risk transfer relating to overseas investments, according to the latest figures from MaPS.
Of the 33,917 MoneyHelper Pension Safeguarding Guidance (PSG) sessions conducted since the pension transfer regulations were introduced, almost half (15,677) were conducted with an attendee who was unaware as to why an amber flag had been raised on their pension transfer.
MaPS said this suggests they may not understand why they needed to attend the appointment, and therefore could have a significant impact on customer engagement and the effectiveness of the PSG sessions.
A further 12,223, or more than a third, were due to a flag being raised on potentially low-risk transfers relating to overseas investments.
In its review of the regulations, published more than a year ago, the DWP acknowledged that the regulation wording in relation to overseas investments was causing delays and issues for many pension savers.
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