There have been many instances in recent years where those who have diligently saved for their retirement have been scammed by being persuaded to transfer to an inappropriate arrangement. Pension providers have been limited in their ability to stop such transfers as the individual has a Statutory right to transfer.
New legislation being introduced today, 30 November, will require Pension Providers to raise a red or amber flag if they believe a transfer attempt to a suspicious scheme is being made, indeed a green flag will only apply in limited circumstances.
It remains to be seen how effective this will be and some will be concerned with the disruption to the individuals right to move their funds. The intention is not to block legitimate transfer requests although may slow the process down, but this should be a small price to pay to stop others facing a retirement in poverty.
There will be a review after 18 months to ensure the rules are effective.
This new legislation effectively suspends the Statutory right to transfer to enable pension providers to protect members from scammers seeking to defraud them of their pension savings