The following is a transcript of a bonus podcast episode of The Pension Confident Podcast. Listen to the episode or scroll on to read the conversation.
PHILIPPA: Have you ever tried to move a pension and wondered why it’s so hard and stressful? This Pension Awareness Week, we’re looking at how the pension transfer process works, and why it should be improved to give savers like us more control of our money. Does there really need to be all that paperwork, all those phone calls? When you think about how easy it is to switch banks nowadays, it doesn’t make sense for a pension to take months, or even years!
I’m Philippa Lamb and if you haven’t subscribed to The Pension Confident Podcast yet, click right now. You’ll never miss an episode!
Before we get going, here’s the usual disclaimer: anything discussed on this podcast shouldn’t be regarded as financial advice or legal advice, and when investing, your capital is at risk.
What inspired Romi to create PensionBee?
PHILIPPA: Pension switching is a subject close to the heart of PensionBee’s Founder and CEO, Romi Savova. In episode 34, she unpacked 10 years of pension changes so we could hear how PensionBee got to where it is now. Here she is talking about how she ran into problems when she wanted to move her own pension and how that experience made her realise there was a gap in the market.
ROMI: Well, I had a personal problem when it came to pensions. I tried to move my account to anyone who’d take it and I discovered that the whole system just doesn’t work well for consumers. It inspired me to do something about it and to solve that very particular problem of people wanting to have transparency and visibility over their retirement savings.
PHILIPPA: It was a fresh idea, wasn’t it? Did people get it straight away?
ROMI: Well, a lot of people said, “I didn’t really know that I could transfer my money, that I could even move my pension. I thought it just had to stay where it was”.
PHILIPPA: Which really proved there was a problem.
ROMI: Absolutely. The pensions industry back then, and even now, loved paper. Paper would just arrive in people’s mailboxes, and they’d put it in a drawer.
More jobs means more lost pensions
PHILIPPA: The average British worker changes jobs every five years, and every new job can mean a new pension pot. That’s a lot of admin! Here’s Romi again.
ROMI: Oh, it’s absolutely enormous! I mean, the average person switches jobs around 11 times. Every time you switch jobs, you get a new pension. You really have to be quite on top of it to keep your money together.
PHILIPPA: So, you think people do lose track of them?
ROMI: Absolutely. They lose track of them. They pile up the paperwork. Some of them get lost entirely. We estimate there’s around £50 billion of lost pensions.
Take an interest in your retirement
PHILIPPA: So lots of us may have multiple pension pots from different employers all hopefully mounting up as time goes on. So why should you bother to take an interest in them until you start thinking about retirement? Especially when the age you can start taking money out keeps going up and up?
ROMI: I firmly believe that you should be engaging early on because I don’t think that mental shift can just occur at the age of 55. If you’ve never engaged and you’ve lost the opportunity to learn about your pension as you go along, coming in at 55 and suddenly being faced with a lot of daunting decisions.
PHILIPPA: Very significant.
ROMI: Significant, daunting decisions. I think that opens up a lot of scope for people to turn in the wrong direction. The best thing is definitely to look at it early on. I think the pensions industry tells you, “don’t worry about it” because inertia is in their commercial interest. I think, do look at it, do ask what it’s invested in, and do decide if that’s right for you - those are actually important concepts. If someone told you, “don’t look at your bank account, we’ve got it sorted out”. Would you listen to that?
It should be simpler to switch pension providers
PHILIPPA: You can switch banks in a week and send money instantly. But when it comes to pension transfers, as we’ve heard, it’s an altogether different experience; it can take months. In the worst cases, it can take years. Obviously it can be very stressful. I understand that many providers already offer secure, electronic transfers, so something’s not adding up. Calls are growing for reform to make the whole system simpler, faster and more user-friendly for consumers. And Romi, she’s one of the leading voices.
ROMI: We think that a pension is your money, and you should be fully in control of it. [Our] government’s job is to help support you to achieve that.
PHILIPPA: What’s it going to take to make that happen?
ROMI: Well, a ‘Pension Switch Guarantee‘, I think, is the obvious reform that we’ve been asking for many years.
PHILIPPA: How would that work?
ROMI: Well, the same way that if you want to move any other financial asset that you have. You tell one company that you’re joining, and another company that you’re leaving, and they have 10 days to move the money from one place to another.
PHILIPPA: Like swapping your utility provider?
ROMI: Just like that.
Sign the petition for a ‘Pension Switch Guarantee’
PHILIPPA: Wouldn’t that be refreshing! If you’d like to know more about transferring your pensions to a provider of your choice, head over to the PensionBee website - there’s a host of really straightforward blogs, videos and explainers on there.
Plus, if you agree there should be a ‘Pension Switch Guarantee‘, you can sign PensionBee’s government petition in just a few taps. It’s running until January 2026. There’s a link in the show notes. If it gets to 10,000 signatures they’ll get a response from the government. If it gets to 100,000 it may even be debated in Parliament.
You can go back and listen in full to episode 34: Unpacking 10 years of pension changes; wherever you get your podcasts. We’re also on YouTube and in the PensionBee app. And while you’re subscribing, please do give us a rating and a review. It really helps the podcast to reach more listeners like you, and the more people learning about how to plan for a happy retirement - the better!
Just a last reminder before we go that anything discussed on the podcast shouldn’t be regarded as financial advice or legal advice. When investing, your capital is at risk. Thanks for listening!
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
