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Longer delays for annuity transfers

Annuity transfers took an average eight days longer in 2008 compared with 2007 despite the ABI initiative to speed them up, according to a new survey.

In the research commissioned by Hargreaves Lansdown, Partnership Assurance analysed 7,500 cases over four years and found transfer times increased by eight working days in the past year from an average of 22 days to 30 days.

But the timeframe was worse for Windsor Life customers, who waited an average 99 working days for their annuity to be transferred – a threefold increase from 33 days.

Lincoln Financial Group took an average of 73 working days from 35 working days.

NatWest took an average of 59 days compared with 54, HSBC took 57 days compared with 19 and Pearl Assurance took 49 days against 34.

The ABI insists its Options’ initiative is helping improve the situation. Spokesman Jon French says: “Options has got off to a great start and we need to build on that success.

“We want all relevant companies using the system and urge any who are not to start as soon as possible.”

But Hargreaves Lansdown pensions analyst Nigel Callaghan says the initiative is “too little too late” and believes it is time for the FSA to step in.

He says: “Insurers have shown they are not prepared to police themselves. The FSA needs to force minimum standards and to give investors an automatic right of redress in the event of non-compliance. These companies are taking a commercial decision to eke a little more profit out of their loyal customers. They are earning an AMC for every day they stall the transfer. This flies in the face of treating customers fairly, smacks of commercial cynicism and simply cannot continue.”

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