Letter From The Founder: Are Pension Providers Intentionally Holding Onto Your Money?

My husband’s pension situation was dire, at best. The irony was not lost on me. I work in finance and help hundreds of people get their finances in order, and yet I had somehow failed to sort out our own household’s.

In my defence, the years in question coincided with me building a business. It’s easy to let something like this happen when one half of the household is in start-up mode, and the other has little appetite for finance.

So in February last year, I decided it was time to take the bull by the horns. Happily, reviewing financial products is part of my job, and I was already aware of the wave of fintech apps built to find and consolidate lost pensions. There was one in particular I’d been meaning to test properly, and so it was that Penny was put to task.

There are an estimated 3.3 million lost pensions in the UK, worth approximately £9,000 each. More often than not, this is simply the result of changing jobs and forgetting the pension left behind.

Auto-enrolment has done a brilliant job of getting the country saving for retirement, but it has also left stacks of small, forgotten pots languishing away unloved, one for every job most of us barely remember taking.

Within moments, his lost pensions had been located and the transfer initiated. I was delighted by how easy the process had been. It didn’t stay that way.
Penny told us the move would take two to four weeks. Weeks turned into months.

None of this was down to Penny. Its side of the job, tracing the pots and submitting the transfer request, was fast, slick, and exactly as promised. The hold-up sat entirely with the providers on the receiving end.

What should have been a straightforward electronic transfer between two mainstream, well-known providers became an exercise in chasing, waiting, and re-explaining who we were and why we wanted the money moved.

I now understand why. Some pension providers process electronic transfers in under a fortnight. Others, mostly those overseen by the Pensions Regulator rather than the Financial Conduct Authority, or third-party administrators who answer to neither, are taking up to eighteen times longer, with the slowest cases stretching to three months and beyond.

The statutory deadline providers are allowed to hide behind is six months, a figure that hasn’t changed in thirty years and was clearly never designed with digital transfers in mind.

Some of that delay is legitimate. Anti-scam checks exist because pension scams are real and devastating, and providers have a genuine duty to pause transfers that look suspicious.

But industry critics argue that duty has been stretched well past its purpose, used to slow down transfers that are plainly ordinary and legitimate. The clearest example: providers have been able to flag a saver’s chosen fund as a suspicious “overseas investment,” even while offering the exact same global tracker fund themselves.

It’s telling that the DWP itself now agrees this has gone too far. In June this year it launched a formal consultation on scrapping that overseas investment flag altogether, along with other rules it admits have created “unnecessary friction for legitimate transfers.”

The consultation closed in July, and we’re waiting to hear what happens next. Add to that an industry still leaning on wet-ink signatures and paper forms sent by post, in 2026, and you start to understand why campaigners took this to Parliament in the first place, with a petition for a legally enforced ten-day transfer guarantee passing 16,500 signatures and forcing that formal government response.

Something is finally moving, slowly, in an industry not known for speed.
Having just completed analysis of the top-performing pension funds in the UK, I knew before the transfer even completed that my husband’s money had almost certainly been sitting in a default fund the entire time, quite possibly underperforming badly.

Over the past ten years, the best-performing default fund in the UK grew by 232 per cent. The worst grew by just 88 per cent. That gap, compounded over a working life, can be the difference between a comfortable retirement and a threadbare one.

The pension pots in question were sitting with Legal and General and Nest, two of the biggest names in UK workplace pensions, and two providers whose own default fund performance illustrates the problem neatly.

Nest alone holds around 13 million members, and more than 99 per cent of them have never once moved away from the default fund they were automatically placed into.

Most people assume “default” means sensible. It rarely means optimised.
So, was any of this intentional? I can’t prove that any single provider set out to slow-walk my husband’s transfer on purpose.

What I can say is that the system, as it stands, rewards inertia. Every month a pension sits unmoved is another month of fees collected on it, another month it stays exactly where a provider would rather it stay.

Whether that’s design or simply an industry that’s never been forced to modernise, the effect on the saver is identical: money that isn’t working as hard as it should, for longer than it needs to.

If there’s one thing I’d want anyone reading this to take from it, it’s not to wait for the system to fix itself. Check where your old pensions are sitting, check what they’re invested in, and don’t assume “it’ll sort itself out”.

If you’re unsure whether your own pension is working as hard as it could be, it’s worth speaking to a regulated independent financial adviser who can look at your specific circumstances.