Hargreaves Lansdown, AJ Bell, Pensions Bee, Vanguard and five other retail Sipp providers, have slammed ‘legacy’ pension providers, for running an ‘archaic’ transfer system that is ‘not fit for purpose’.
In a collective report, they claim these legacy providers are mis-using anti-scam legislation to delay legitimate transfers.
They also call for the transfer deadline to be slashed from six months to just 30 working days.
The report highlights a number of ‘quick wins’ and longer-term reforms, which they claim could see digital pension platforms provide £18bn in annual benefits to the UK economy by 2055.
This report is commissioned by nine digital pension platforms, including AJ Bell, Freetrade, Hargreaves Lansdown, Interactive Investor, JP Morgan Personal Investing, Moneybox, Monzo, PensionBee and Vanguard.
The report contains a number of recommendations to improve this pension ‘plumbing’. As well as slashing transfer deadlines, the providers want to see a ‘digital first’ presumption. This should include mandation from regulators that digital journeys are the default, requiring firms to “comply or explain” if they insist on manual paperwork.
The report also recommends a universal ‘due-diligence checklist’ to ensure transparency over the reasons for blocking transfers.
In addition, providers are also calling for Government to introduce a pensions ‘tax roadmap’, designed to prevent the ‘deleterious’ consumer harm caused by speculative tax rumours before every Budget.
The report says the direct-to-consumer digital pension sector has already become a central pillar of the UK economy, with £139bn in assets under management — equivalent to 5 per cent of UK GDP.
By 2055, it predicts that this sector will contribute £9.1bn to the economy through higher productivity and £9bn through increased pensioner incomes.
The report says pensions savers are currently confined by a 180-day statutory limit on transfers — which it adds is “out of touch” with transfer times across the rest of the financial system.
The report accuses ;legacy’ providers of often using ‘sludge’ practices, such as requiring signatures on paper forms—to delay transfers. It says: “Even more concerning is the outright misuse of anti-scam legislation, where firms trigger ‘amber flags’ for schemes provided by prominent FCA-regulated providers, for example.”
It adds that digital platforms are of particular value for the UK’s four million self-employed workers, who remain largely shut out of traditional workplace schemes.
Brian Byrnes, director of personal finance at Moneybox says: “The overall customer experience is only as good as the slowest innovators, and savers should not still be relying on paper processes in 2026.
“For too long, legacy providers have lagged in adopting innovations that improve saver engagement and outcomes. The FCA must look beyond headline statistics and examine why pension transfers so often stall. There are cases where providers flag ‘overseas investments’ while offering the same global tracker funds themselves, raising questions about whether these flags are being used to frustrate legitimate transfers and retain customer funds.”
PensionBee UK chief business officer UK Lisa Picardo says: “Pensions belong to savers, not the Government or providers. Individuals carry the risk if their retirement savings fall short, so they should have real choice over how and where their money is invested.
“They must also be free to move providers easily, yet the transfer process still isn’t fit for purpose. As workplace schemes consolidate, and investment strategies converge and move towards private markets, it’s vital that savers can still vote with their feet when it comes to what may be the biggest and most consequential pot of money they’ll ever own.”
AJ Bell director of public policy Tom Selby adds: “Government, regulators, and the pensions industry need to work together to tear down any existing barriers to support the government’s retail investing drive and turn Brits from savers into a nation of investors.
“Driving down transfers times across the market is essential, as is aligning the regulatory approach for retail and workplace pensions so we can deliver better outcomes for investors and support the UK’s retail investment ambitions.”
Helen Morrissey, head of retirement analysis, Hargreaves Lansdown adds: “The current pension transfer system is woefully out of step with wider financial services. Longer term we would like to see government revisit the Lifetime Pension Pot set up which allows people to choose which provider receives their contributions. It’s a step that enables people to keep track of their pensions and could be a gamechanger in how people engage with them.”