The pension transfer system is “not fit for purpose” and risks undermining the potential economic benefits of digital pension platforms, according to a new report from a coalition of digital platform providers.
AJ Bell, Freetrade, Hargreaves Lansdown, Interactive Investor, J.P. Morgan Personal Investing, Moneybox, Monzo, PensionBee and Vanguard have commissioned a report exploring the current state of the pension transfer system.
The analysis found that the direct-to-consumer digital pension sector is expected to contribute £9.1 billion to the economy by 2055 through higher productivity and £9 billion through increased pensioner incomes.
However, it warned that a modernisation of the ‘plumbing’ of the pensions market will be fundamental to securing improved retirement outcomes and realising the economic growth afforded by digital pension platforms.
The report said savers are confined by a 180-day statutory limit on transfers which seems “out of touch” with the rest of modern finance and called for the deadline to be slashed to 30 days.
The coalition accused legacy providers of often using ‘sludge’ practices, such as requiring signatures on paper forms, to delay transfers, as well as misusing anti-scam regulation where firms trigger amber flags for schemes.
As well as a reduction of the transfer deadline, the coalition is calling for the introduction of a ‘digital-first’ presumption that makes manual paperwork the exception rather than the rule.
The report also recommends a universal ‘due diligence checklist’ to ensure transparency over the reasons for blocking transfers, alongside a long-term Pensions Tax Roadmap to avoid the harmful speculation that precedes every Budget.
It warns that increased visibility without a modern transfer system will lead to mass consumer frustration.
Brian Byrnes, director of personal finance at Moneybox, said: “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.”
Lisa Picardo, chief business officer UK at PensionBee, commented: “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.”
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