Friday, May 20, 2022
HomeFinancial PlanningLow threat pension transfers being caught underneath new guidelines

Low threat pension transfers being caught underneath new guidelines



Amber flags are being raised on doubtlessly low-risk pension transfers because of a ‘weak point’ regarding abroad investments within the new guidelines, in keeping with a brand new report.

Abroad investments have been the commonest reason for an ‘amber flag’ being raised throughout a pension switch in keeping with a freedom of knowledge request to the Cash and Pensions Service (MaPS) by Quilter.

This was given as the rationale in virtually 40% of recorded instances, leading to at the very least 134 transfers being placed on maintain because of this to the top of March.

Quilter mentioned figures seemingly present only a small illustration of a a lot wider subject, as MaPS solely retains a document the place the member is given the main points of the amber flag by the transferring scheme.

Some pension schemes are elevating amber flags on abroad investments protecting mainstream investments because of the broad means the foundations are worded, corresponding to funds from asset managers investing globally.

Jon Greer, head of retirement coverage at Quilter, mentioned: “Within the 12 months to 31 November 2021, the Cash and Pensions Service took simply 482 calls and webchats in relation to pensions scams. Comparatively, within the 4 months that adopted the introduction of the brand new pension guidelines, this determine practically doubled to 856. This highlights the true disconnect between the variety of folks whose pension transfers have been doubtlessly being focused by a rip-off, versus the quantity of people that have been capable of establish this and attain out for assist.

“Nonetheless, whereas it’s constructive to see such a famous improve within the variety of folks receiving rip-off steerage in terms of their pension transfers – notably the place there’s a real trigger for concern – there stays a transparent subject with transfers being halted the place the trustees are discovering an amber flag as a result of the brand new scheme presents abroad funding included within the receiving scheme – as is the case in lots of UK registered pension schemes. There’s a clear divergence between coverage intention and the sensible utility of the regulation.”

The brand new pension switch guidelines have been launched in November which require the trustees of a transferring pension to lift an amber flag, which pauses a pension switch, in the event that they discover that there are abroad investments included within the receiving scheme or different related points.

Earlier than the switch will be authorised, the member concerned should show they’ve acquired rip-off steerage from the MaPS following the switch being flagged.

For the reason that introduction of the brand new switch guidelines, 856 members have acquired rip-off steerage from MaPS because of an amber flag being raised by a trustee (to the top of March).

The variety of amber flags raised have risen considerably month-on-month, rising from 20 steerage classes in December 2021 to 505 in March 2022.




RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Recent Comments