Modernising pension transfers: unlocking choice and engagement for savers

The UK pensions landscape is changing rapidly. As defined benefit schemes decline and defined contribution pensions become the norm, more responsibility than ever is falling on individuals to build the retirement they want.

That’s why the personal pensions market - particularly direct-to-consumer digital platforms - has become such an important part of the system. 

Today, households hold around £4.8 trillion in pension wealth across the UK, with a growing share sitting in defined contribution pensions. Within that, digital personal pension platforms are a fast-growing segment that give savers greater control, transparency, and choice over their retirement savings. 

Alongside a coalition of major pension and investment platforms, PensionBee recently helped commission new research. In it, we examine how this part of the market is evolving - and what needs to change to ensure it delivers the best outcomes for savers.

The findings are clear: while the personal pensions market is growing in importance, the systems that support it are struggling to keep up.

A growing pillar of the pensions system

Direct-to-consumer digital personal pensions have moved from niche products to a mainstream option for many savers. Our analysis estimates that this part of the market held around £139 billion in assets in 2025 - equivalent to roughly 5% of UK GDP. 

Looking ahead, the potential impact is even greater. By 2055, digital personal pension platforms could contribute around £18 billion annually to the UK economy through higher productivity and stronger pensioner incomes. 

For savers, these platforms provide something equally important: flexibility and engagement. They make it easier for people to manage their retirement savings, choose investments, and consolidate multiple pension pots in one place.

This is particularly valuable for groups that have historically been underserved by the traditional pensions system.

Take the UK’s 4 million self-employed workers. Many don’t benefit from automatic enrolment into workplace pensions and instead need flexible ways to save for retirement. Yet only around 20% of the self-employed currently contribute to a private pension. That leaves many at risk of reaching retirement with little more than the State Pension. 

Digital personal pensions can help close this gap by making it easier for people with irregular incomes to save and stay engaged with their long-term finances.

The transfer system holding savers back

But while the technology powering modern pensions has moved forward, the infrastructure behind the scenes hasn’t always kept pace.

One of the biggest challenges highlighted in the report is the current pension transfer process. In theory, transfers are key for allowing savers to consolidate pots, switch providers, and take control of their retirement savings.

In practice, however, the system is often slow, complex, and frustrating.

Under current regulations, pension transfers can take up to six months. In a world where bank accounts can be switched in seven days and ISAs transferred in a matter of weeks, this timeline feels increasingly out of step with modern financial services. 

At PensionBee, we believe savers deserve better. That’s why we’ve been campaigning for faster transfers through our 10-day Pension Switch Guarantee initiative, which calls on the industry to dramatically reduce switching times. 

Faster transfers would make it easier for people to consolidate their pensions, stay engaged with their savings, and ultimately make better decisions about their financial future.

A once-in-a-generation opportunity

The pensions system is approaching an important turning point.

The introduction of Pensions Dashboards - expected to connect schemes from 2026 - could transform how people view and understand their retirement savings. By bringing multiple pensions into one place, dashboards have the potential to dramatically improve engagement. 

But visibility alone isn’t enough. If savers can see all their pensions but still face slow or complicated transfer processes, frustration will quickly follow.

That’s why the report calls for several practical reforms, including: 

• reducing the statutory transfer deadline to 30 working days; 
• introducing a digital-first approach to transfers; and
• creating clearer, standardised processes across the industry. 

These changes may sound technical, but their impact would be significant. A faster, more transparent transfer system would make it easier for savers to consolidate pots, switch providers, and engage more actively with their retirement planning.

Putting savers back in control

Ultimately, pensions belong to the people saving into them. Individuals carry the risk if their retirement savings fall short, so they should have genuine freedom to choose how and where their money’s managed.

Modernising the ‘plumbing’ of the pensions system may not always grab headlines. But it’s essential if we want a system that truly works for savers.

By embracing digital processes, improving transfer timelines, and focusing on consumer outcomes, policymakers and industry leaders have an opportunity to build a pensions system that’s fit for the future - and gives people the control they deserve over one of the most important financial decisions of their lives.