Regardless of how you want to look at things, the financial sector is doing everything in its power to run itself into the ground. In the United Kingdom a new scandal has been revealed, where the largest work pension schemes prevent savers from accessing funds, and cash transfers are delayed by over three months. Something will have to change sooner or later.
Converting Final Salary Pensions To Cash is A Struggle
Employees are counting down the days until they can finally access their pension savings in the United Kingdom. However, that process is taking much longer than it should, as some of the major work pension schemes are withholding funds for up to three months. As a result of these delays, several savers are informed their fund calculations are no longer valid, and will need to be redone. This comes at an additional cost of £400, mind you.
To make matters even worse, these new calculations also mean funds need to be transferred to another provider, or cash in. Either one of these processes can take anywhere from six days up to a full year. Spending money the way consumers want is still a far cry from being possible, as the inconvenience and additional costs are major hurdles to overcome.
On average, pension savers are waiting between 11 – 12 weeks to receive key information on how to access their funds. While these numbers might not seem significant for most people, the UK government announced pension reforms earlier this year. The one goal of these reforms is to give pension savers unfettered access to their retirement funds, without any of these unnecessary hurdles.
It goes without saying that these delays associated with accessing pension funds are creating stressful situations all over the United Kingdom. In a perfect world, accessing pension funds should be as easy as changing bank accounts or mobile providers. But in the real world, UK pension schemes are unable – or unwilling – to provide adequate customer support.
As you would come to expect, the UK pension schemes are claiming these reports are vastly exaggerated, as they all go “above and beyond” for their customers. In fact, all of these schemes seem more than willing to blame the lack of information provider by its members, rather than addressing the real issues plaguing the UK pension system for many years now.
The traditional financial system has become incredibly slow and is impossible to comprehend for anyone involved in the sector. For some reason, no one from within the system is willing to fix these issues, as they all keep a “laissez-faire” attitude. In the end, this will be the downfall of the financial system as we know it.
Blockchain Solution for Pension Payments?
One way to possibly improve the pension payment situation is by introducing a solution based on blockchain technology. This platform could serve as a way for members to submit any and all documentation required, as well as for pension schemes to provide real-time and transparent updates regarding someone’s case.
Integration of a blockchain-based solution into the pension system will require a fair amount of R&D, as engineers and developers must build a custom-tailored solution. That being said, this technology is accessible to anyone in the world, free of charge, and it should be a no-brainer for any institution to at least explore its potential.
This seems to be the major problem in this situation, as pension schemes are far less transparent than they could – and perhaps – should be regarding this matter. Once all parties come to a more agreeable technological solution, this situation could very well resolve itself altogether. But until then, the traditional financial system keeps shooting itself in the foot at every turn.
Source: Telegraph UK
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