The Government is proposing changes to pension transfer rules after finding that safeguards designed to stop scams can also cause delays and unnecessary friction for legitimate transfers.
Pension scam protections exist for a very good reason.
If there are genuine warning signs that someone's retirement savings are being transferred to a scam or suspicious investment, pension providers should intervene.
But rules introduced in 2021 have also created problems for legitimate pension transfers.
The Government has now acknowledged that the rules can result in additional checks, inconsistent processes and unnecessary delays even where there is little or no concern about a scam.
It is proposing changes.
People generally have a statutory right to transfer their pension when the relevant legal conditions are met.
In November 2021, new regulations introduced additional conditions designed to protect pension savers from scams.
Providers were required to consider warning signs known as red and amber flags.
A red flag can mean there is no statutory right to transfer.
An amber flag can require the customer to take pension safeguarding guidance from MoneyHelper before their statutory transfer can proceed.
Legitimate transfers can get caught up in the safeguards too.
The Government's review found that the rules have sometimes resulted in:
additional due diligence where there was no concern about a scam;
inconsistent approaches between pension providers;
customers being asked for significant amounts of evidence;
longer transfer times;
multiple MoneyHelper appointments when consolidating several pensions; and
legitimate transfers being flagged because the receiving pension invests overseas.
The Government also found that the current rules can restrict providers' ability to use their own experience and judgement where a transfer presents a demonstrably low risk of a scam.
See the Government's review of the 2021 pension transfer rules.
At Pension App, we help customers trace pensions from previous jobs and transfer eligible pensions into one place.
When our pension scheme was new, transfers into it could be subject to significant additional due diligence by the customer's existing pension provider.
For customers, this sometimes meant extra forms and paperwork before their transfer could proceed.
Paper-based processes created their own problems.
Forms weren't always received. Completed paperwork could be delayed or need to be resubmitted. Each additional step created another opportunity for a legitimate pension transfer to stall.
Our experience also varied significantly between providers.
Some worked constructively with us to complete their checks and get legitimate transfers through the process.
Others introduced considerably more friction.
The issue isn't whether providers should protect customers from scams.
They absolutely should.
The question is whether legitimate transfers should face unnecessary barriers where there is no genuine indication that the customer is being scammed.
This is one of the key proposed changes.
Under the current system, only certain types of receiving pension automatically satisfy what's known as the First Condition.
Other transfers can fall under the Second Condition, bringing the red and amber flag checks into play.
The Government says this has resulted in some providers carrying out additional due diligence even where they have no concerns about the receiving scheme.
It is proposing to allow a wider range of reputable pension schemes to satisfy the First Condition.
Providers could take account of information including their previous experience with the receiving scheme and the characteristics of that scheme.
That could allow straightforward transfers between legitimate pension schemes to proceed without unnecessary additional checks.
Investing overseas is completely normal for a modern pension.
A diversified pension fund might invest in companies and other assets across the UK, US, Europe, Asia and elsewhere.
But under the current transfer regulations, overseas investments can trigger an amber flag.
That can result in the customer having to take pension safeguarding guidance from MoneyHelper before their transfer can proceed.
The Government now believes this rule is catching legitimate transfers unnecessarily.
Its 2026 consultation acknowledges that many legitimate pension schemes include overseas investments and proposes removing the overseas investment amber flag.
See the Government's proposal to remove the overseas investment amber flag.
One provider transferring pensions to Pension App routinely applies the overseas investment amber flag because the Pension App pension's investment portfolio includes overseas investments.
As a result, customers transferring from that provider are referred to MoneyHelper for pension safeguarding guidance before the transfer can proceed.
But we're not talking about an unusual offshore investment opportunity.
Pension App customers invest in a diversified portfolio that includes investments across different countries.
The Pensions Regulator's own guidance makes an important distinction here.
It explains that the concern isn't simply investment in something such as a global equity fund. The concern is overseas investments involving lax or non-existent regulation or jurisdictions that allow opaque corporate structures.
Yet the regulations have led to different interpretations in practice.
The Pensions Ombudsman has also reported little consistency in how schemes approach overseas investments, with some taking a cautious approach that can result in an amber flag being identified in most or all cases where overseas investment is present.
See The Pensions Regulator's guidance on overseas investments.
The overseas investment flag isn't a niche issue.
The Government says that in 2025, more than a third of pension safeguarding appointments were triggered solely because the receiving pension contained overseas investments.
That means consumers can be sent for safeguarding guidance even when overseas exposure simply forms part of an otherwise mainstream pension investment.
The Government now proposes removing the overseas investment amber flag altogether.
Importantly, that doesn't mean removing protection against genuinely concerning investments.
Other amber flags will continue to cover issues such as:
high-risk or unregulated investments;
unclear or high fees; and
unclear, complex or unorthodox investment structures.
The Government believes those safeguards can address the relevant risks without treating overseas investment itself as a warning sign.
See why the Government wants to change the amber flag rules.
The current system can create another problem for people bringing several pensions together.
Each existing pension provider carries out its own transfer checks.
If more than one identifies an amber flag, the customer can potentially find themselves going through the safeguarding process more than once.
The Government's review specifically identified customers having to attend multiple safeguarding appointments when consolidating several pension pots.
It is now proposing that where someone can provide evidence that they have already completed the required MoneyHelper safeguarding guidance, they may not have to repeat it for another transfer request received within the relevant 12-month period.
That could remove unnecessary duplication while retaining the safeguarding requirement.
No.
The proposals aren't about removing pension scam protections.
Red and amber flags would remain.
The Government is also proposing changes elsewhere in the rules to strengthen protection where appropriate.
The objective is to make the safeguards better targeted.
Where there is genuine evidence of a potential scam or suspicious investment, providers should be able to intervene.
But where someone is transferring their pension to a legitimate, reputable scheme, the Government wants providers to have greater ability to allow that transfer to proceed without unnecessary friction.
Pension scams continue to present significant risks to consumers. Customers should ensure they understand any receiving pension arrangement and seek regulated financial advice where appropriate.
Making a transfer easier does not mean that transferring is suitable for everyone.
Before transferring, you should understand the benefits, guarantees, charges and tax position of your existing pension and compare them with the proposed receiving arrangement.
Depending on the pension, transferring could mean:
losing safeguarded or guaranteed benefits;
paying exit penalties or transfer charges;
giving up a Guaranteed Annuity Rate (GAR) or other valuable guarantees;
giving up defined benefit (DB) scheme rights, including a guaranteed retirement income and potentially inflation-linked or dependant benefits;
changing the investment risks and charges applying to your pension; or
potential tax consequences, depending on the type of pension, benefits and your individual circumstances.
Defined benefit pensions and pensions containing safeguarded benefits require particular care. Where safeguarded benefits valued at £30,000 or more are being transferred to flexible benefits, appropriate independent advice is generally required by law.
A pension transfer can involve someone's life savings.
Protecting that money from scammers is essential.
But unnecessary delays can cause consumer detriment too.
Customers can spend weeks or months completing additional checks, chasing paperwork or waiting for a transfer that ultimately turns out to have presented little or no scam risk.
There needs to be a balance.
Strong safeguards where there's a genuine risk.
Straightforward transfers where there isn't.
The Government's proposed changes are an attempt to get closer to that balance.
The consultation ran from 9 June to 21 July 2026 and has now closed.
The changes are not yet in force.
The Government will need to consider the responses, publish its conclusions and finalise the regulations before the rules change.
This is also expected to form part of wider work looking at how pension transfers and scam protections can be modernised.
Pension App helps customers trace pensions from previous jobs and transfer eligible pensions into one place.
As part of that process, we work with existing pension providers to complete the checks and transfer requirements that apply.
Not every pension can or should be transferred, and appropriate safeguards remain important.
Before transferring, check whether your existing pension has safeguarded benefits, guaranteed annuity rates, defined benefit rights or other guarantees that could be lost. You should also check for exit penalties or transfer charges and consider the charges, investment risks and potential tax consequences of moving your pension.
But legitimate pension consolidation shouldn't be made unnecessarily difficult simply because a receiving scheme is relatively new or because a mainstream diversified pension fund invests internationally.
This article provides general information and is not financial advice. The changes discussed are Government proposals and are not yet in force. Pension transfers are subject to eligibility, legislation and the rules and processes of the pension schemes involved.