Financial Conduct Authority review finds most life insurers process pension transfers within 20 days but flags slow outliers and long delays where additional checks apply

The Financial Conduct Authority published findings from a multi-firm review of life insurers’ pension transfer processes, concluding that most ceding schemes complete transfers within a suitable timeframe and that use of digital transfer platforms is typically associated with faster processing. The review nonetheless identified significant variation between firms, including some taking materially longer than peers, and the FCA said it will follow up with firms showing slower service. The review drew on data from 18 life insurers administering over 12 million individual personal pension policies, representing around 80% of individual personal pensions held by life insurers, and covered nearly 1 million transfer requests over a 12-month period. More than three-quarters of firms completed transfer requests, on average, within 20 days, and around 87% of transfers were handled by firms reporting completion of all transfers within 15 days. Where no additional checks were required, over three-quarters of firms completed transfers within 10 days (shortest 5 days), while transfers involving additional steps and checks averaged 26 to 160 days, with half of firms taking 41 to 80 days. Most firms used the Origo Transfer Service, with transfers generally quicker than paper-based processes; a small number of firms did not measure the full end-to-end time for some paper applications. Amber flags under the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 were applied to fewer than 2% of requests after an instruction to transfer was received, and fewer than 1% of requests were stopped by firms, commonly linked to missing required information, missing evidence of MoneyHelper guidance where required, unauthorised involvement, or transfers following unsolicited contact. Where firms could capture destination data, around 40% of transfers went to other life insurers and a similar proportion to self-invested personal pensions. Alongside the findings, the FCA reiterated expectations under the Consumer Duty and Conduct of Business rules to execute transfer requests within a reasonable time, avoid “sludge” practices that create unreasonable barriers, and use “positive friction” only where appropriate to protect consumers from harm such as scams. The FCA also pointed to DP24/3 on adapting requirements for a changing pensions market, with feedback and any consultation proposals to be published in due course.