How pension transfers could soon be made simpler

The Department for Work and Pensions (DWP) has announced plans to reduce unneccessary delays when savers transfer their pension.

Regulations introduced in 2021 to protect people from scams have in some cases been a barrier to legitimate pension transfers, either by stopping them completely or slowing them down.

Here's how the proposed changes could lead to a smoother transfer process.

More savers are moving their pensions

Around 1.7m pension transfers took place in 2025, up by 13% on 2024, according to data from the electronic pension transfer service Origo. 

There are various reasons for moving your pension to a new provider. If you have multiple schemes in different places, it can help to reduce your admin, and it can also reduce costs if you move to a provider with lower charges.

Transfer numbers are expected to rise even further when pensions dashboards are introduced in the coming year. These will enable savers to see all their pensions in one place, making it easier to plan for retirement.

The average transfer time was 11.4 days during 2025, according to Origo data, but in some cases it can take much longer.

• Find out more: should I combine my pensions?

How pension transfer rules combat scams

The amount of money being lost to pension scams forced the government to introduce tighter controls within the transfer system. 

The Pension Schemes Act 2021 introduced a warning-flag system designed to protect savers from being scammed by transferring funds to a fraudulent or high-risk investment scheme.

Under this system, scheme trustees and administrators are able to block or investigate pension transfers when they have identified a ‘red’ or ‘amber’ flag.

A transfer is stopped immediately if it is assigned a red flag, while an amber flag pauses the transfer and requires the saver to have a pensions safeguarding appointment with the government's MoneyHelper service.

Possible red flags currently include:

• being given an ‘incentive’ to transfer
• being pressured to transfer
• unsolicited contact encouraging the transfer
• unregulated advice
• failure by the member to provide required information

Amber flags are triggered where the transfer involves:

• unclear or high fees
• overseas investments
• high risk or unregulated investments
• investments that are unclear, complex or unorthodox

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What's causing the delays?

There are occasions when trustees are raising red and amber flags, putting a block on transfers, even when the transfer is going to a reputable regulated provider and there’s no sign of fraud.

It has been argued that the current rules are written too broadly, meaning many pension funds are being flagged just for having some overseas investments or offering promotional deals.

Where a transfer isn’t completely stopped and the member has to attend a guidance session with MoneyHelper, it can take weeks to get a free appointment time.

Research from provider Pension Bee showed that only a minority of transfers flagged as potential scams are genuinely dubious.

Its Freedom of Information request obtained from the Money and Pensions Service found that overseas investments accounted for 35% of all amber flags since 2021, despite overseas investments being a standard feature of almost all legitimate pension schemes. 

How could transfer rules change?

Proposed amendments to the regulations broaden the circumstances in which trustees can go ahead with a transfer without enhanced due diligence.

It will allow them to make a transfer to a scheme where they are satisfied, on the balance of probabilities, that the scheme is ‘reputable’.

Amending the regulations so that transfers to FCA-authorised personal pension schemes such as Sipps can go ahead without extra checks, and removing the overseas investment amber flag, will mean more transfers can progress smoothly and quickly. 

The DWP is also tightening up controls on transfers to small self-administered schemes (Ssas). An Ssas is an occupational pension designed specifically for limited company directors, senior executives and business owners.

There will be a new red flag where an Ssas transfer is proposed and the evidence provided does not demonstrate an employment link with the receiving occupational pension scheme.

• Find out more: Best Sipps 2026

How the pension transfer process works

• Request a statement of your pension transfer value from your current provider: you can then apply to your new provider to start the move. It will guide you through and request any paperwork needed. 
• Track progress: avoid delays by completing forms accurately and promptly, and stay in touch with both providers. If transfers exceed three months without reason, this may justify you making a complaint.
• Wait for notification: once you've been told transfer is complete, you should review statements from your new pension account to ensure they’re correct. You usually have 30 days to cancel the transfer but your previous provider might refuse to take it back – and if the value drops, you could get less money back.