Red/amber flags in pension transfers

The proposed red and amber flag changes are well intentioned, but they come more than a decade after the risks first became clear following pension freedoms in 2015.
“Over that time, scams have already caused significant harm, so for many, the damage has been done. In practice, the current system has often created more friction than protection, with legitimate transfers delayed for months despite all information being provided.
The draft changes, particularly around SSAS transfers and clearer red flags where there is no genuine employment link, are sensible steps. But the challenge remains getting the balance right — protecting clients from scams without unnecessarily slowing down straightforward, legitimate transfers.”

The proposed changes are a useful tightening of the bolts, not a full rebuild of the pension transfer system. Making a failed SSAS employment link a red flag is sensible, because an amber flag can still leave too much room for a determined scammer and a confused saver. Trustees need clear grounds to stop a suspect transfer, not a regulatory fog that leaves everyone half-protected and nervous. But this will only improve outcomes if it is applied with judgement. The danger is always that anti-scam rules catch legitimate transfers in the net while the real villains learn a new route around it. The aim should be simple- faster transfers for clean cases, firmer blocks for dubious ones.

It is good this is being reviewed as finding the right balance between scam prevention and too much friction for legitimate transfers is important.

I have seen individuals being asked to speak to the MAPS multiple time in as many months to consolidate multiple pension pots into one. So enabling one review / discussion with MAPS to be used my different pension providers is sensible.