Amber flags are being raised on potentially low-risk transfers relating to overseas investments, causing at least 134 pension transfers to be put on hold between November 2021 and March 2022, according to Quilter.
The wealth manager gathered data from the Money and Pensions Service (MaPS), revealing overseas investments caused 40% of the recorded amber flags to be raised, which resulted in at least 134 pension transfers put on hold between the introduction of new pension rules in November 2021 until the end of March 2022.
The second most common reason was high risk or unregulated investments, which raised 81 amber flags, followed by unclear/high fees (55 flags raised), complex investment structure (45 flags), high volume to same scheme (15 flags), evidence provided not genuine (13) and high volume of transfers with the same financial adviser (5).
The figures likely show just a small representation of a much wider issue, according to Quilter, as MaPS only keeps a record where the member is given the details of the amber flag by the transferring scheme.
New pension transfer rules were rules introduced on 30 November 2021 to cut down on scam and fraudulent activity. The new rules empower trustees to block or pause transfers where there is potential scam activity.
A red flag would allow trustees and scheme managers to completely block a transfer request where there are tell-tale signs of fraud, while the amber flag would allow a transfer to be paused until a member has…
