Over the past decade, the process of transferring UK pensions to New Zealand’s QROPS has undergone significant changes. By analyzing transfer duration data from 2014 to 2024, we can observe a clear upward trend in the time required to complete these transactions. This increase correlates strongly with UK legislative changes designed to make pension transfers more difficult, particularly those aimed at preventing pension fraud and ensuring compliance with UK pension regulations.
A sample of 1,500 pension transfers were analysed. The analysis is based on the period from when the member decided that they wanted to transfer and completed until the money arrived in the NZ QROPS scheme.
Key Trends in Transfer Duration
1. Increasing Transfer Times:
- From 2014 to 2016, the average pension transfer time was between 50-65 days.
- By 2017, this had risen to nearly 70 days, continuing an upward trajectory.
- In recent years, transfer durations have become even longer, exceeding 100 days in some cases.
2. Greater Variability in Processing Times:
- The box and whisker analysis reveals a widening range of transfer times, especially after 2016.
- While some pension providers maintain relatively fast processing, others have significantly delayed transfers, with the slowest cases exceeding 150 days.
Correlation with UK Legislative Changes
The observed increase in transfer times aligns with several key regulatory changes in the UK pension landscape:
- 2015 Pension Freedoms Act: Introduced more flexibility for pension withdrawals, increasing scrutiny over pension transfers and slowing down approvals.
- 2017 HMRC Tightening of QROPS Rules: Many NZ QROPS were delisted due to non-compliance with new requirements, causing increased delays in processing transfers.
- 2021 Pension Schemes Act: Introduced stricter anti-scam measures, requiring additional due diligence by UK pension providers before allowing transfers. This has added weeks or even months to some transactions.
- 2023 FCA (Financial Conduct Authority) Guidelines: Placed additional reporting and approval requirements on pension providers, further increasing delays.
The Naughty and Nice List Revealed
When transferring pensions from the UK to New Zealand, time matters. Delays can create frustration, uncertainty, and potential financial impact for those awaiting their funds. Based on our latest analysis of large UK pension providers, we’ve categorized them into two groups—those who keep things moving smoothly and those who take their time, well beyond what’s reasonable.
The Nice List
These providers have demonstrated a commitment to efficiency, ensuring pension transfers are handled with care and timeliness:
- Clerical Medical
- Zurich
- ReAssure
- Standard Life
The Naughty List
Unfortunately, some providers have shown significant delays, with all of them taking well over 100 days to complete pension transfers. If you’re working with one of these providers, be prepared for a lengthy wait:
- Sun Life Financial of Canada
- Scottish Widows
- Royal London
- Phoenix Life Limited
- Aviva
- AEGON
If your provider is on the naughty list, it may be worth reaching out to them for clarification on processing times. For those on the nice list, we applaud their efficiency and hope more providers follow suit.
As pension transfers continue to be an essential part of financial planning for those moving to New Zealand, we encourage providers to streamline their processes and ensure that customers experience a smoother transition.
Conclusion
The trend of increasing transfer times suggests that UK pension regulations have successfully made pension transfers more complex and time-consuming. While these measures help protect individuals from pension fraud, they also create unintended delays for legitimate pension transfers. Looking ahead, unless regulatory frameworks are revised to balance fraud prevention with efficient processing, UK pension holders looking to transfer to NZ may continue to experience prolonged wait times, so if your transfer is urgent based on tax timings plan accordingly.
