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The Pension transfer process has often been seen as slow and frustrating, but the latest data from Origo offers a glimpse into what’s possible when technology and automation are used to their full potential.
According to the Origo Transfer Index, the average time for their transfer service, which handles the majority of DC Pension transfers in the UK, has now dropped to 11.9 calendar days,down from 14 days in January 2023. This progress is even more impressive considering it comes even as transfer volumes have increased by over 20%.
Origo’s success is a perfect example of how technology can deliver real efficiency without compromising on service. However, this success begs the question: why aren’t more pension schemes following suit?
A Divided Market: Origo and Non-Origo Providers
Origo’s Transfer service is a clear example of how technology, when integrated properly, can streamline even the most complex processes. The fact that transfer times have decreased despite a rise in volume proves that automation isn’t just a buzzword, it’s a necessary tool for the future of Financial Services.
Yet, far too many Pension schemes are still relying on manual forms and outdated processes, slowing down transfers and frustrating both advisers and clients alike. By contrast, Origo’s automated system is setting a new standard, offering faster, more reliable transfers that benefit everyone involved.
It’s time the rest of the industry took note.
Efficiency for Some, Frustration for Others
While Origo has made impressive strides, the broader Pension industry is still hampered by manual processes. Whether it’s filling out paper forms or exchanging documents through the post, these outdated practices are no longer fit for purpose in today’s fast-paced world.
This inefficiency isn’t just inconvenient; it creates unnecessary delays and adds pressure to administrative teams who are already stretched thin. The need for change is clear. The tools to streamline these processes exist—we just need to make the decision to implement them.
We are Needlessly Throwing Time and Money Away
This week, I began assisting a new client in setting up an annuity for a customer. The process involves transferring nine separate pensions, but only three of these can be completed digitally through Origo. The remaining six require manual paperwork, leading to significant increase in costs, delays, and additional work for everyone involved.
How much of an increase, exactly? Well, I'm glad you asked:
Firstly, the annuity provider must spent approximately 6 hours preparing and sending documents to six ceding schemes, costing about £72 in administrative expenses (based on a £25,000 salary).
The customer then spends around 2 hours of their time signing all these documents.
Next, as the outsourced administrator, I spend about 10 hours following up with the six providers, costing the adviser £400 at my rate of £40 per hour.
Lastly, the adviser themselves misses out on approximately £350 worth of revenue-generating work due to the time they could have allocated elsewhere.
In total, this manual process results in an unnecessary expenditure of about 20 hours and £882, simply because the transfers can’t be completed digitally.
And this doesn’t even account for the stress and frustration experienced by all parties due to the delays.
This aspect of the process is often under-recognised, yet it places a significant burden on advisers, administrators, and customers who are working towards securing income, ideally before Christmas.
If all providers utilised Origo’s digital transfer system, customers would gain quicker and easier access to their money, and everyone involved would save valuable time and resources.
The FCA Wants to Help—We Just Need to Speak Up
The FCA has shown a keen interest in improving the efficiency of the Pension transfer process. They’ve recognised the issues and have taken steps to encourage better practices across the industry. However, real change won’t happen unless more voices speak up and flag the inefficiencies that still exist.
It’s essential that advisers, administrators, and firms alike bring these concerns to the FCA. Whether it’s highlighting the delays caused by manual processes or advocating for broader use of automated systems like Origo, the more we raise awareness, the closer we’ll get to a fully modernised transfer process.
Change Is Knocking, and Technology Is the Key
It’s clear that Origo’s transfer service is just the beginning. If more pension schemes embrace automation and integration, we could see transfer times improve across the board. Not only would this make life easier for advisers and administrators, but it would also greatly improve the client experience, something that should always be our top priority.
The industry has proven its ability to adapt to change before, and there’s no reason why we can’t do the same now with technology. By fully embracing the tools available to us, we can create a more efficient,streamlined process that benefits everyone involved.
A Bright Future for Pension Transfers
The success of Origo’s Transfer Service shows us what’s possible when we let go of outdated processes and embrace modern technology. Faster transfers, reduced admin burdens, and happier clients—this is the future of Pension Transfers.
At Rose FP Solutions, we believe in the power of integration and automation to drive these changes forward.
Let’s work together to ensure the entire industry benefits from the same efficiencies that Origo has achieved. The tools are here, now it’s time to make the most of them.