What is it all about?

Fraudsters frequently offer too good to be true incentives such as free pension reviews, early access to pension cash, or other time-limited offers. Lured by these offers, people can be tricked into transferring their pension into a scam scheme and defrauded out of their savings.

The Pensions Regulator has put in place new regulations to prevent this from happening and have provided pension trustees and scheme managers with new powers to intervene. The regulations introduce a system of red and amber flags and give trustees and scheme managers the power to refuse transfers where there's a heightened risk it may be part of a scam.

Where there are tell-tale signs of fraud, or methods frequently used by scammers, trustees and scheme managers will be able to prevent a transfer request by giving it a red flag. In other circumstances where fraud is suspected, an amber flag will pause a transfer until the scheme member can prove they have taken scam specific guidance from MoneyHelper, a government-backed organisation.

How may this affect you

Scheme administrators may take longer to process your transfer request as they may need to request further information to enable them to follow the new guidance.

However, if you are transferring to a public service scheme, an authorised mastertrust or authorised collective defined contribution scheme, there will be no extra checks necessary other than the standard due diligence (i.e. receiving scheme details and details of your Financial Adviser if applicable).