UK gov’t unveils stricter pension transfer rules to fight scams
The UK’s Department for Work and Pension (DWP) has introduced a set of laws designed to prevent pension transfer scams.
Fraudsters often use pension freedoms and the statutory right to transfer to another scheme as a way to persuade consumers into moving their life savings into a bogus pension.
As a result, the DWP has set out that savers will not be able to invoke their right to transfer on every single occasion, but only if they are moving their pots into public service pension schemes, master trust schemes and/or collective money purchase schemes.
Trustees and scheme managers will be given the ability to prevent or pause a transfer request under a ‘red’ and ‘amber’ flag system.
AJ Bell explains that a red flag can be triggered if:
The member has not responded to a request of information on the suspicious transfer;
They have received financial advice from a firm without the appropriate permissions;
The transfer has been requested following an unsolicited from a person or firm the member had no relationship with; and/or,
The member has been pressured or felt pressured to transfer.
Read more @International Adviser
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