Earlier this year, the Money and Pensions Service reported a sharp increase in the number of scam guidance sessions following the changes to the pension transfer rules
A number of pension providers are misusing their powers by delaying or blocking pension transfers, according to PensionBee.
In December, the Department for Work and Pensions (DWP) established the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021, enabling pension transfers to be blocked where there was a high risk of a scam.
However, it is claimed that the legislation is reportedly being taken advantage of providers, who are said to be adding additional steps to hinder the transfer process, consequently causing genuine pension transfers to be delayed or blocked.
Concerns regarding international investments are among the reasons that consumers have been presented with the reasons for these delays.
Earlier this year, the Money and Pensions Service reported a sharp increase in the number of scam guidance sessions following the changes to the pension transfer rules.
Similarly, since 2018, there has been a 45% increase in the pension transfer times, with some savers being put off from attempting a pension transfer in the future.
PensionBee chief executive Romi Savova said: It is appalling to see pension schemes abuse regulations to prevent savers from moving their retirement savings to their provider of choice.
This type of behaviour is unacceptable for any institution, but particularly for companies that have been entrusted with savers’ hard-earned pension savings, she said.
Providers cannot hide behind new legislation to justify the disappointing rise in pension transfer times and must remember the impact their decisions have on the consumers they are meant to serve, she said.
She said: It is time for regulators to take pension transfer times seriously and introduce a ten-day pension switch guarantee.