If you can switch a bank account in seven days, why does moving a pension still take weeks, months, or in the worst cases, years?

That’s the question at the heart of a recent FT Adviser podcast, recorded as part of the Tidy Up Transfers campaign. Host Sonia Rach put it to STAR Chair Andrew Marker, alongside PensionBee’s Lisa Picardo, in a conversation about why pension transfers remain one of the industry’s biggest pain points – and what’s fixable.

Listen to the full podcast here.

Pensions can be complex

Pensions are undeniably more complex than bank accounts – guarantees, legacy products and decades of regulatory history mean every transfer can look different. But complexity isn’t an excuse for how long transfers take, says Andrew. What’s needed is a common process that makes the transfer type irrelevant to the customer experience – exactly what STAR has been built to deliver: a shared set of standards the whole industry can work towards, replacing today’s fragmented landscape of multiple regulators, scheme types and third-party administrators.

There’s real progress to recognise too: an FCA review found large life insurers completing many transfers efficiently. The sharpest pain point sits with TPR-regulated schemes and master trusts, many of which are yet to adopt electronic transfer methods – precisely the gap STAR’s standards are designed to close.

When safeguarding tips into obstruction

The podcast chat turned to the 2021 transfer regulations, brought in to protect consumers from scams. It’s a balance, Andrew argues, between safeguarding and unnecessary obstruction: vague criteria, such as flagging any transfer involving overseas investments, can send an otherwise legitimate transfer into a lengthy administrative loop. Better-targeted red flags – a newly registered scheme, say, rather than the assets it holds – would let most transfers complete quickly while still catching actual scams.

The six-month statutory backstop is another sticking point. Built for a defined benefit (DB) world, it sends the wrong message in an increasingly defined contribution (DC) market. Electronic transfers should help this improve naturally, but regulation needs to evolve alongside it, rather than holding onto legacy DB thinking.

STAR’s answer: transparency

Transparency, says Andrew, is the single biggest lever for change – and it’s the principle STAR is built around. Common standards, a two-day turnaround per step, and a move towards full management information are designed to make sludge practices visible for the first time. Without that data, it’s almost impossible for the industry to evidence exactly where the problems lie. Once every organisation is submitting data, advisers and consumers alike will be able to see who’s performing well – gold, silver or bronze – and know what to expect.

There’s a commercial case too: transparency motivates organisations to compete on service, improving the client experience and helping attract new business – a win for the whole industry, provided both simple and complex transfers are catered for.

The human cost of delay

Behind the statistics is a real impact on people. Many consumers are auto-enrolled rather than choosing their provider, Lisa pointed out, and only get to make an active choice much later – often hitting repeated hiccups and delays that lead them to give up, particularly younger, frequently job-switching savers trying to consolidate their pots. Andrew gently pushed back on any suggestion that advisers underestimate this impact, citing Consumer Duty obligations and a clear industry-wide desire to deliver good outcomes, while acknowledging it’s the paper-based processes, not the electronic ones, that continue to cause the most harm.

What about the Pensions Dashboard?

With the Pensions Dashboard on the horizon, Andrew expects it to help clean up some of the underlying data, such as policy numbers – but cautions against treating it as a silver bullet, flagging it could even create new bottlenecks for DB transfers specifically. Lisa expects transfer volumes to rise sharply once the Dashboard goes live, as people are reunited with pots they’d lost track of – which only reinforces the point: it’s a view, not a transfer platform, and exactly why the industry needs standards like STAR’s in place now, ahead of that surge in activity.

The bottom line

Pension transfers have come a long way, but there is still meaningful ground to cover. Better-targeted safeguarding, modernised processes for the schemes lagging furthest behind, and real transparency are the building blocks for change. That’s the gap STAR’s standards and accreditation are designed to close – and why the Tidy Up Transfers campaign continues to push for an industry that makes transferring a pension as straightforward as it should be.