The Financial Conduct Authority today published an update on the new pension flexibilities which indicated that the average call wait times to pension providers had dropped from 4.5 minutes to 3.5 minutes, while abandonment rates fell to 16% from 20% from April to July.
Tom McPhail, head of pensions research at Hargreaves Lansdown, said these figures are “quite shocking, particularly when you consider that these investors have entrusted their life savings to these companies”.
He said it is clear that parts of the pensions industry are “still struggling” to meet the new demands.
“Investors have a right to expect a decent level of service when dealing with their retirement savings,” he said. “There is an urgent need for pension companies, the government and the regulators to work together to resolve these problems for the benefit of pension savers.”
“There is an urgent need for pension companies, the government and the regulators to work together to resolve these problems for the benefit of pension savers”
The FCA said it was aware of some “operational challenges” some firms were facing, but said most companies had coped well with the additional demand.
“Telephone call wait times and abandonment rates were higher than all parties would have liked in April, although they have improved since that time and are continuing to improve,” it said.
“Unnecessary barriers”
The body also pointed to “unnecessary barriers” which are currently preventing firms from delivering on customers’ instructions, including requests to access their cash, and to switch products or providers.
Ensuring all customers can access their pension savings without obstacles, like large exit fees, was highlighted as the FCA’s next point of focus.
McPhail said the pension freedoms present an opportunity for the pensions industry to show that it is able to give its customers a 21st Century service. “This means putting the customer first,” he said.
“There’s a lot more work to be done. On pension transfer times, for example, which can still result in delays of several weeks before investors can get control of their money.”
Last month, the Association of British Insurers hit back at chancellor George Osborne for announcing his plan to launch a consultation to check providers were not charging “excessive” exit fees.
Earlier in the month, Friends Life apologised to customers after announcing it would not be offering partial withdrawals from their pension pots.
