Pension system in the UK declared 'BROKEN' as Britons 'waiting months' for retirement payments

According to the report, while certain providers demonstrate excellent standards, others continue relying on paper-based processes and manual systems that generate unnecessary obstacles for consumers.

The company accuses some pension providers of deploying "sludge" tactics designed to obstruct transfers, leaving savers experiencing confusion, frustration and anxiety when attempting to access their own money. The report sets out five practical reforms to address these systemic failures.

Central to the proposals is a Pension Switch Guarantee ensuring most defined contribution transfers complete within ten working days.

PensionBee is also calling for compulsory digital transfers across all pension schemes, with particular urgency around trust-based schemes under The Pensions Regulator's oversight.

The company wants providers forced to publish performance statistics, enabling savers to compare services and hold firms accountable.

Additionally, the report demands reform of transfer scams legislation, arguing the current Amber and Red Flag framework is being exploited to justify unnecessary delays.

Finally, PensionBee urges reducing the statutory six-month transfer deadline, unchanged for over three decades and wholly unsuited to the digital age.

The report identifies Britain's dual regulatory structure as a fundamental barrier to progress, with the Financial Conduct Authority (FCA) and The Pensions Regulator creating an inconsistent two-tier system for consumers.

Providers regulated by the FCA typically process digital transfers within days, whereas many trust-based schemes under TPR supervision lag significantly behind.

This regulatory fragmentation, combined with outdated IT infrastructure and absent enforceable standards, has produced what PensionBee describes as a lottery for savers.

Over 6,500 individuals have now backed the company's petition for a 10-day guarantee ahead of a January 2026 deadline.

The firm warns that the forthcoming Pensions Dashboard launch and inheritance tax changes will spark a wave of pension consolidations, potentially exposing millions more savers to preventable delays without swift action.

Lisa Picardo, Chief Business Officer UK at PensionBee, said: "Britain's pension transfer system is broken, but it's capable of being fixed.

"People quite rightly expect their pensions to work like every other part of their financial life to be simple, efficient and digital. If you can move money between banks in seconds, there's no excuse for pensions taking months."

She added: "In 2025, it's unacceptable that savers are still waiting months sometimes even years just to move their own money.

"The technology to deliver fast, secure digital transfers already exists and is proven to work."

Ms Picardo called for Government and regulators to establish enforceable standards and hold providers accountable.

Chancellor Rachel Reeves unveiled reforms to pension policy during last month's Budget statement on November 26.