Changes needed in pension transfer regulations to create fewer “delays and issues” for pension savers - LCP

The review of the Conditions for Transfers Regulations 2021, published today by the DWP, estimates that the regulations have stopped approximately 2,000 transfers taking place which may have been fraudulent.

Commenting on today’s publication LCP Principal Shayala McRae said: "We welcome this evidence that these regulations have given trustees the tools to act where they have concerns about the legitimacy of a transfer. However, we are concerned that some of the practical applications of some of the provisions – in particular, the incentives red flag and the overseas investments amber flag - are still causing delays and issues for pension savers. This coincides with LCP’s own experience because around 90% of the transfers we deal with have been referred for Pension Safeguarding appointments simply because the receiving scheme has overseas investment funds with no other immediate reason for an amber flag. Although the DWP has acknowledged these concerns and undertaken to conduct further work to consider if changes could be made to these aspects of the regulations, we are disappointed that no timescale for such changes has been proposed. We urge DWP to make the necessary amendments as quickly as possible."