Pension schemes will soon be able to block suspicious transfers amid rise in scams – but will new red tape send prudent savers crazy?
- If spotting ‘red flags’, the pension provider will be able to block the transfer
- With ‘amber flags’, the pension saver will need to take scams guidance first
- New rules will come into effect on 30 November
Pension schemes will soon be allowed to stop suspicious transfers under new Government rules aimed at protecting savers against pension scams.
From 30 November, it will be up to pension trustees and scheme managers to decide whether to approve a member’s request to transfer their pension pot to another scheme.
While designed to prevent savers from handing their life savings to fraudsters, the move also means more red tape and possible delays for legitimate transfers, as some experts have pointed out.
New pension rules: Pension providers will soon be allowed to stop suspicious transfers
The rules are in response to a rise in pension transfer scams since the introduction of pension freedoms in 2015.
Since then, savers can access their pots from the age of 55 and can do with them what they please, including withdrawing all funds in a…