Options assessment

Question 1

1. Summary of proposal

Accepted Answer

1. The Department for Work and Pensions is proposing amendments to the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021.^{[footnote 1]} This establishes a safeguarding framework to protect members from pension scams through the use of red and amber flags to indicate potential risk.

2. The consultation sets out a targeted response to an emerging risk associated with transfers into smaller schemes, specifically Small Self‑Administered Schemes (SSASs), where additional safeguards are now considered necessary.

Question 2

2. Strategic case for proposed regulation

Accepted Answer

Policy Background

3. Automatic Enrolment has been a huge success bringing millions more people into pension saving, with over 23 million people now saving into a workplace pension.^{[footnote 2]} This is leading to individuals having greater pension wealth, which continues to grow, with the average Defined Contribution (DC) pot nearly doubling since 2020.^{[footnote 3]} Individuals also have had greater freedoms since 2015 on how they can access their pension for retirement, with around half of DC pots accessed via full cash withdrawals.^{[footnote 4]}

4. The DC-trust landscape is growing in scale and maturing quickly with 32.8 million DC memberships in 2025, a 7% increase from the year before. DC trust workplace pension assets have grown to £249 billion, increasing from only £22 billion in 2012. This is against a market that continues to consolidate, with the number of pension providers reducing from around 3,700 in 2012 to around 800 schemes now (with 12+ members).^{[footnote 5]}

5. To protect pension savers from being victims of pensions fraud, the Government introduced the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021.^{[footnote 6]} This created a set of conditions which must be satisfied before a statutory pension transfer can take place, giving trustees and scheme managers power to act where they have concerns about a transfer:

(i) First condition is satisfied where the trustees or managers of the transferring scheme satisfy themselves the receiving scheme is a Public Service Pension Scheme, an authorised Master Trust or an authorised Collective Money Purchase Scheme.

(ii) Second condition applies to all statutory transfers that are not covered by the First Condition and places a requirement on all schemes to decide whether red and amber flags may be present.

(a) Red flags where one or more of the indicators of high scam risk have been identified, for example the member has failed to provide a substantive response to a request for evidence or information.

(b)Amber flags where there may be a risk, for example the evidence provided by the member in response to a request for evidence or information under the regulations is incomplete.

These powers enable trustees and managers of transferring schemes to prevent transfers (red flags) or to mandate that the member take prescribed pension transfer scams guidance (amber flags), from the Money and Pensions Service (MaPS), before the transfer can go ahead.

6. The regulations provide a safeguard against pension transfer scams, whilst continuing to enable the majority of transfers to proceed without undue delay.

7. A review of the regulations^{[footnote 7]} from the Department for Work and Pensions (with participation from pension providers and administrators, legal firms, professional bodies, industry groups and regulators) concluded that the original policy intent remains appropriate. However, the practical application of certain provisions in the regulations may have caused some delays to transfers taking place. Four key concerns were found:

(a) The criteria to satisfy the first condition is too narrow and blocks a transfer when trustees have no concern that the receiving scheme could be a scam.

(b) The wording of the incentives red flag requires that the transfer is blocked even if there are no concerns of a scam risk.

(c) Wording of the provision in relation to the overseas investment amber flag may require attendance at a Money and Pensions Service (MaPS) safeguarding appointment even when the transferring scheme does not believe there is a scam risk.

(d) Pension members are required to attend multiple safeguarding appointments when consolidating pension pots.

8. Additionally, evidence from the National Economic Crime Centre (NECC) and The Pensions Regulator has identified an emerging concern around Small Self-Administered Schemes (SSASs). There are currently around 60,000 SSAS savers across 21,000 schemes, reflecting a small but important part of the pensions landscape. SSASs are a form of occupational pension scheme typically established by company directors for themselves and key employees. They offer flexibility, allowing members to manage investments directly and to invest in a broad range of assets, including commercial property and certain loans to the sponsoring employer, in ways that can support both retirement planning and wider business objectives.^{[footnote 8]}

9. However, the concern is these schemes may be more vulnerable to those seeking to abuse the system. While many providers operate responsibly, some recent evidence from National Economic Crime Centre (NECC) shows the possibility of deliberate and organised misuse such as investments in non-standard assets and arrangements seeking to present pension liberation activity^{[footnote 9]} as legitimate investment opportunities. It is estimated that there are on average over 100 transfers into SSASs per year based on data from The Pensions Regulator. Data from Report Fraud suggests that up to 1-in-10 of these could be a fraudulent transfer (although this is likely to be a significant underestimate due to under-reporting).

10. This Government has zero tolerance for pension fraud or organised misuse. It is therefore making further steps to reduce the risk of fraud and scams, which can have a devastating impact on victims’ lives, through further planned changes. To target this emerging SSAS risk, proposed amendments will include a change to introduce a new red flag where a transfer is proposed into a SSAS and the member is unable to demonstrate a verifiable employment link with the receiving scheme. This will act as a clear and robust safeguard. A missing employment link is a strong indicator that the receiving SSAS may be operating outside its legitimate purpose. The new red flag will empower trustees to refuse the transfer, helping to ensure that SSASs are used only for their intended, lawful functions, denying fraudsters opportunities to exploit the system.

Data on pension fraud

11. Data on scams and fraud can be challenging given known underreporting^{[footnote 10]} and the fact that there is not one single dataset which captures transfers taking place across the pension industry. Therefore, data is drawn across multiple sources to build an estimate of the impacts of the measures. This includes:

Financial Conduct Authority’s (FCA) Financial Lives Survey which is a large-scale quantitative survey which asks about financial fraud and scams
18-month post-implementation review the Department undertook in 2023. This included data and feedback from over 20 pension schemes, administrators, and industry bodies, with 11 providing detailed data. This included many large multi-employer schemes, which together represented more than 10 million members across both DB and DC markets, providing a broad and representative view of emerging trends. In total, representation of the data collection ranges from around 17%-26% (see table in paragraph 36 below) across three key metrics: number of amber flag appointments, number of transfers and membership size of schemes that took part in the review
Report Fraud have provided information on the estimated number of transfers which were reported to have been scams
The Pensions Regulator have provided recent examples of SSAS scam cases

12. To improve the evidence and data further, the consultation will include questions on available data and evidence stakeholders may have to support the final Impact Assessment.

Overall Impact

13. Pension scams remain a small part of the landscape but can have a devastating impact on people’s lives. In 2024, 0.8m adults (1.5%) reported experiencing a pensions-related and/or an investments-related fraud or scam in the previous 12 months.^{[footnote 11]}

14. As Automatic Enrolment has created more pension savers (over 23 million currently saving into a workplace pension; over 11 million higher than 2012), more people now have pension wealth that could be impacted.^{[footnote 12]} The greater number of pension savers is also leading to greater numbers of pension transfers taking place across the market. One company facilitating pension transfers reported around 1.5 million transfers completed in 2024 worth approximately £66.7 billion. This was up from 1.2 million transfers in 2023 worth £52.4 billion and just over one million transfers in 2022 with a value of £42 billion.^{[footnote 13]}

15. There are currently around 60,000 SSAS savers across 21,000 schemes, reflecting a small but important part of the pensions landscape. However, there is emerging concern that the SSAS model may be vulnerable to those seeking to abuse the system. While many providers operate responsibly, recent internal evidence of collated case studies from The Pensions Regulator shows limited oversight may have enabled poor practices and, in some cases, the possibility of deliberate and organised misuse. It is estimated that in recent years, there are on average over 100 transfers into SSASs per year. Based on an internal statement provided by Report Fraud, up to 1-in-10 of these could be a fraudulent transfer, although this is likely to be a significant underestimate due to under‑reporting. While these cases represent a small proportion of overall pension transfers, the consequences when things go wrong are severe. Data from Report Fraud^{[footnote 14]} shows the impact pension fraud has on victims with the average financial loss in 2024/25 being £18,400. Where an investment was identified as the primary vehicle for pension fraud, as is commonly observed in case studies relating to potential SSAS fraud, the average loss per victim increases drastically to £38,400.

Market Failures

16. The loss of pension savings, whether through decisions made under pressure or through explicit fraud, can be financially and emotionally devastating. Intervening can therefore deliver strong benefits to many pension savers.

17. Market intervention is justified given the number of market failures which exist. This includes:

Information asymmetry – Fraudulent SSASs typically know far more than the victims and deliberately mislead them about the risks, investments, fees and legitimacy involved. This is particularly the case given low pension knowledge and engagement. Only 24% of those currently contributing to a DC pension have high levels of engagement with their DC pension and 57% are not aware fees are charged on DC pensions.^{[footnote 15]}
Loss of trust – Scams can erode trust in pension savings, which may lead to a negative externality of reduced pension participation and increasing the number of under-savers in retirement.
Further negative externalities – The harms of pension scams are not limited to the victims themselves. There is additional burden on regulatory bodies, government departments such as the Home Office, bodies embedded within the police services such as Report Fraud, while providers, government and government departments are likely to suffer from reputational damage. Moreover, families and dependents of the victims are also negatively affected and suffer from the financial and emotional consequences from the victims being scammed.^{[footnote 16]}
Inefficiency – The government review of the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021,^{[footnote 17]} published in 2023, found the original policy intent remains appropriate and the regulations have played a key role in creating a safer transfer environment. However, it also found certain aspects of the practical application of the regulations may have caused complication and possibly delays for some sections of industry. Waiting times for Money and Pensions Service (MaPS) safeguarding appointments increased from 2 to 6 weeks during the 18-month review period with many members attending appointments where there was no suspicion of a scam due to the interpretation of the regulations. As such, this is resulting in inefficiencies that are a cost to pension members, pension schemes and MaPS. The changes will result in fewer transfers being inappropriately flagged, leading to time-savings for providers and individuals.

Question 3

3. SMART objectives for intervention

Accepted Answer

Policy objective

18. DWP is committed to providing strong, zero‑tolerance protections against pension fraud while ensuring transfer processes are efficient, proportionate, and reflective of how pension schemes operate. These additional proposed amendments draw on evidence and stakeholder engagement and aim to target genuine risks more precisely, removing unnecessary friction without weakening safeguards.

19. The policy objectives are specific, measurable, achievable, realistic and time-limited (SMART):

Specific: The proposed legislative changes seek to strengthen protections against evolving pension scam risks, while simplifying aspects of the current requirements that may be unnecessarily complex.
Measurable: Success in achieving the objective would be measured in terms of smoother processing of legitimate transfers (measured by a reduction in the delay of transfers going through), as well as a reduction in the number of SSAS pension fraud cases.
Achievable: The objective is achievable through amendments to the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 legislation, made under the powers of the Pension Schemes Act 2021.^{[footnote 18]}
Realistic: The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 provided the Secretary of State with delegated powers to amend the transfer conditions through secondary legislation, enabling the Government to respond swiftly to emerging scam risks and procedural complications as they arise. The proposed amendments intend to use these powers to for this very purpose and fit into the wider government objective of ensuring an efficient and safe private pensions system in the UK.
Timely: The Department is launching a time-limited consultation to seek views on our policy proposals, giving consultees a clear period during which they can share their thoughts but ensuring action can be taken quickly too. This would inform the development of legislation as well as whether consultees foresee any issues in the practical implementation of the amended regulations.

Question 4

4. Description of proposed intervention and explanation of the logical change process whereby this achieves SMART objectives

Accepted Answer

Preferred option

20. The preferred option is to amend the current legislation framework which will include targeted changes to:

Introduce a new red flag where a transfer is proposed into a Small Self‑Administered Scheme (SSAS) and the member is unable to demonstrate a verifiable employment link with the receiving scheme.
This option will be implemented by amending Regulation 8(5) to provide that a red flag will be present where [the receiving scheme is an occupational pension scheme that does not fall within the First Condition, and the] trustees or managers of the transferring scheme determine that, although the member has provided all of the evidence required under regulation 10(1)(a) and 11, that evidence does not demonstrate an employment link between the member and the receiving scheme. This will operate alongside the existing red‑flag provision in regulation 8(4)(a), which applies where the member has failed to provide a substantive response to a request for evidence or information in respect of the Second Condition.
Revising Regulation 6(1) - This amendment relates to the First Condition of the transfer regulations and introduces that trustees must be satisfied on the balance of probabilities that the receiving scheme is a reputable pension scheme so as to ensure that the transfer will not lead to a scam. By introducing this amendment trustees can determine, without considering whether flags are present, that the statutory right to transfer is maintained. This maintains protection while supporting a more proportionate assessment under the First Condition.
Broadening Regulation 7(3) and 7(4) - This is a consequential amendment to the revision of regulation 6(1). The amendment adds “any other pension scheme” (7(3)d)), which the trustees or managers consider is a reputable scheme (7(4)(c)), to those able to satisfy the First Condition, enabling trustees to proceed confidently with transfers where they know there is no fraud risk.
Amending Regulation 9(1A) - Members who have taken Money and Pensions Service (MaPS) guidance within the last 12 months will be exempt from repeating it when an amber flag is present, as set out in regulation 9(2) to 9(5), removing unnecessary duplication and improving the member experience.
Removing the Overseas definition and Overseas Investment Amber Flag (Regulation 9(5)(d) and 9(9)) - This reflects the reality that many legitimate schemes include overseas investments. Fraud risk associated with these investments is adequately covered elsewhere in the Regulations, allowing this flag to be removed without reducing saver protection.

Question 5

5. Summary of long-list and alternatives

Accepted Answer

Options considered

Policy option 1 – Do nothing

21. Doing nothing would still result in the Red/Amber flags being used and some scams being stopped. However, this would not build on the review findings highlighting the case for change. The review of the regulations found the original policy intent remains appropriate but feedback from the pensions industry highlighted areas which could be improved. Without change, this would lead to pension members having significant issues, with legitimate transfer requests being delayed or blocked. Waiting times for MaPS Safeguarding appointments increased from 2 to 6 weeks during the period of the review with many members attending appointments where there was no suspicion of a scam due to the interpretation of the regulations.

22. Additionally, the rise of concerns posed by SSAS transfers would leave trustees and scheme managers without a clear regulatory basis to intervene which could lead to a continued rise in SSAS fraud/scams. This would likely result in continued consumer detriment, financial loss to savers, and increased pressure on regulators and redress mechanisms, undermining confidence in the pension transfer system.

23. As such, the do-nothing option results in continued inefficiencies that are a cost to pension members, pension schemes and MaPS.

Policy option 2 – Amending regulations based on review (preferred option)

24. As outlined in Section 4, the preferred option is amendments to the regulations to directly tackle the evidence found in the review. This should deliver efficiency savings for pension providers and members, all whilst ensuring strong protections remain in place. The further development of SSAS restriction should help reduce fraudulent transfers with minimal burden on the pension industry. The underlying rationale for these changes is member protection, and this is the measure which best addresses this.

Policy option 3 – Use of guidance to change enforcement practices

25. DWP has already considered whether the problems highlighted in the review could be resolved by making changes to practices within the existing legislative framework. In July 2022 DWP and The Pension Regulator [TPR] issued a joint statement to clarify what is meant by wording in specific areas of the existing regulations, in order to enforce them more effectively. Whilst this intervention sought to achieve a uniform understanding of the regulation’s intent, subsequent data used to inform the review showed that there remained different interpretations of the guidance and inconsistent approaches as to how it is applied in practice. It is therefore clear regulations need to be amended to accord with the policy intent more clearly and that satisfactory outcomes cannot be achieved by alternative non-regulatory approaches.

Small and Micro Businesses Assessment (SAMBA)

Context

26. To be consistent with the Pensions Scheme Bill 2025 Impact Assessment^{[footnote 19]}, Small and Micro businesses are defined as DC schemes with fewer than 1,000 members. This is not a perfect definition as scheme size and employer size do not always correlate. Importantly, trust-based schemes can be set up by both smaller and larger employers, with a trend of smaller employers using authorised Master Trusts for workplace pensions to minimise costs and improve governance.

27. The cost to business falls predominantly on pension schemes, providers, and administrators, including small and micro businesses who operate small and micro pension schemes. However, assessing the impact of the regulations on this group is difficult, as it is not necessary that small and micro pension schemes correspond to small and micro businesses. For example, many large firms may run Executive Pension Plans with only a few members. Similarly, small employers may enter their staff in larger master trust schemes. For the part of the legislation that applies to pension schemes and providers, as there is currently no robust evidence to link pension scheme size to employer size, it is difficult to accurately assess the impact on small and micro businesses.

28. All pension schemes and providers within the industry will need to familiarise themselves with the regulations, although many use administrators who will do this instead. It is estimated that approximately 15,700 micro schemes will need to familiarise themselves with the regulations. This is about 89% of the unique businesses that will need to familiarise, and therefore the majority of familiarisation costs fall to micro schemes. However, this is not disproportionate to the industry as a whole, where 80% of DC schemes within the trust-based market are micro schemes. Those schemes, which are self-administering, will incur a familiarisation cost estimated to be approximately £19, while for those who use an administrator this cost will be met by the administrator (whose service they are already paying for). Therefore, familiarisation is not expected to have a disproportionate impact on micro schemes.

29. Some schemes will also need to develop new knowledge around assessing whether schemes are reputable. We have assumed self-administered schemes with member sizes between 2-11 will not undergo this process given they are not likely to receive transfer requests frequently and therefore there is not a disproportionate impact on micro schemes here either.

Exemptions

30. Since members in any pension scheme can be at risk of pension fraud, the regulations do not exempt small and micro schemes. Some of the amendments to the transfer regulations are specifically aimed at tightening regulations around transfers into SSASs, which would fall into the definition of small and micro businesses. Nevertheless, the administrative burden around verifying transfers into legitimate SSASs falls on the original and initial scheme the pensioner member will be part of, which based on case studies, is highly likely to be a larger scheme that does not fall into the definition of a small and micro business. Given SSASs are a form of occupational pension scheme typically established by company directors for themselves and key employees, they are only likely to face modest familiarisation costs and will not accrue costs of assessing reputable schemes, given they are not likely to receive transfer requests frequently. Transfers can continue to take place into SSASs where there is a clear employment link.

Proportionality

31. The trust-based market has around 25,000 schemes with over 30 million members. There are currently around 60,000 SSAS savers across 21,000 schemes, reflecting a very small but important part of the pensions landscape.^{[footnote 20]} The costs to business associated with these regulations, including to SSASs, are minimal and modest. The proposed regulatory changes have been deliberately kept to a minimum and, in some cases, generate savings for business by reducing friction.

Mitigations

32. There are no specific mitigations in place for small and micro schemes since costs accrued from the regulations are not expected to be burdensome upon these schemes. The previous regulations were reviewed, and the changes build on industry feedback to ensure they work effectively. DWP will continue to engage with industry to closely monitor any proposed changes and ensure they are not having a disproportionate impact on smaller employers.

Question 6

6. Description of shortlisted policy options carried forward

Accepted Answer

33. The proposed amendments are intended to deliver a targeted and proportionate response to an emerging scam risk, involving SSASs, by introducing a new red flag where there is no demonstrable employment link. This will enable trustees and managers to stop transfers where the risk of harm is high. Additionally, building on business feedback, further changes aim to reduce the regulatory burden placed on schemes by addressing procedural concerns which may have caused disproportionate friction in the transfer process. Specifically, broadening the First Condition, removing the overseas residency flag, and eliminating the requirement for members to attend multiple MaPS appointments when consolidating pensions.

Question 7

7. Regulatory scorecard for preferred option

Accepted Answer

Part A: Overall and stakeholder impacts

	(1) Overall impacts on total welfare	Directional rating
Description of overall expected impact	The overall expected impact of the policy is expected to be Positive. This is based on the expected positive monetised impacts being greater than the expected negative monetised impacts. Positive impacts include reducing the risk of pension scams taking place into SSASs, benefits from removing repeat pension safeguarding appointments, widening the scope for the first condition for a pension transfer to go through, and removing the overseas flag, all of which are expected to improve efficiency without negative consequences. There is expected to be significant non-monetised benefits to the wider public service sector, such as The Pensions Regulator, the Money and Pensions Service, and police authorities.	Positive – Based on all impacts
Monetised impacts	A total of £23.3 million Net Present Social Value (NPSV) is expected from the amendment to the transfer regulations. Meanwhile, the EANDCB is estimated to be -£1.8 million (a net benefit to businesses)	Positive – Based on EANDCB and £NPSV
Non-monetised impacts	There is expected to be positive non-monetised benefits of the amendment to the transfer regulations. These non-monetised benefits are realised by the wider public service sector, such as (a) The Pensions Regulator and the police authorities, who should face fewer cases to investigate on pension fraud, (b) the Money and Pensions Service, who will benefit from no longer holding unnecessary pension safeguarding appointments.	Positive
Any significant or adverse distributional impacts?	No significant or adverse distributional impacts are expected.	Neutral

	(2) Expected impacts on businesses	Directional rating
Description of overall business impact	The business impact of the amendment to the transfer regulations is expected to be positive. There is a small cost to schemes that arises from monetised familiarisation costs, assessing reputable schemes, and establishing employment links when dealing with a transfer into a SSAS. However, the benefits from the removal of the overseas flag, the removal of repeat pension safeguarding appointments, and widening the scope of the first condition for a pension transfer is expected to outweigh the costs.	Positive
Monetised impacts	The Equivalent Annual Net Direct Cost to Business (EANDCB) is -£1.8 million.	Positive
Non-monetised impacts	There are likely to be additional benefits to businesses from the measures. For example, fewer complaints (from having a more efficient process) and improved trust in pensions (through reduced number of scams).	Positive
Any significant or adverse distributional impacts?	It is not expected that amendment to the transfer regulations will cause any significant or adverse distributional impacts to businesses.	Neutral

	(3) Expected impacts on households	Directional rating
Description of overall household impact	The amendments to the transfer regulations are expected to generate positive benefits to households – in particular, pensioner members. While it is estimated that there will be small costs to members needing to provide evidence of an employment link when seeking to transfer into a SSAS, this is heavily outweighed by the benefits members will realise from the removal of the overseas flag, no longer having to attend repeat pension safeguarding appointments, from the widening of the scope for the first condition of a pension transfer, and crucially, from the prevention of SSAS pension fraud due to the introduction of the new red flag associated with SSAS transfers.	Positive
Monetised impacts	The Equivalent Annual Net Direct Cost to Households (EANDCH) for has been calculated as -£0.9 million (a net benefit to households) through reduction in the number of scams and time savings from reduced appointments and paperwork which need to be completed.	Positive – Based on EANDCH
Non-monetised impacts	The amendments to the transfer regulations are expected to result in fewer cases of pension fraud, which will increase the trust and confidence of pensioner members in the UK pension system. This could encourage greater pension savings, which may improve adequacy outcomes in retirement. A reduction in cases of pension fraud will also mean that fewer individuals have to deal with the emotional stress and health consequences of losing their pension savings.	Positive
Any significant or adverse distributional impacts?	It is not expected that the amendments to transfer regulations will cause any significant or adverse distributional impacts to households.	Neutral

Part B: Impacts on wider government priorities

Category	Description of impact	Directional rating
Business environment: Does the measure impact on the ease of doing business in the UK?	It is not expected that the amendments to transfer regulations will cause any significant or adverse impacts on doing business in the UK.	Neutral
International Considerations: Does the measure support international trade and investment?	The amendments to transfer regulations are not expected to have an impact on trade.	Neutral
Natural capital and Decarbonisation: Does the measure support commitments to improve the environment and decarbonise?	It is not expected the amendments to transfer regulations will have any impact on the state of UK natural capital and decarbonisation in the economy. It is also not expected that they will have any effects on the environment or greenhouse gas emissions.	Neutral

Pension Transfers and Flags

34. To conceptualise the costs and benefits that are estimated to be accrued from the amendments to the legislation, it is important to recognise the processes involved with the current flag system with pension transfers. When a pension transfer is flagged as amber, it means that there is a risk of pension fraud occurring. Among the reasons for an amber flag are unusually high or unclear charges by the scheme a member seeks to transfer into, or unregulated, high-risk or overseas investment. In the review of the regulations, it has been recognised that many legitimate schemes invest overseas. Fraud risk associated with these investments is adequately covered elsewhere in the Regulations, allowing this flag to be removed without reducing saver protection. The member still has the right to pursue this transfer but must first attend a MoneyHelper Pension Safeguarding Guidance appointment to understand the potential risks and impacts of this transfer. When a pension transfer is flagged as red, it means that the original scheme deems there to be high risk of pension fraud occurring and therefore does not sanction the transfer. Among the reasons for a red flag include the member making a transfer request after receiving a cold call or being promised a payment or other incentives for making the transfer. A member has the right to raise a complaint if they disagree with the decision.^{[footnote 21]}

35. Data collected from the industry for the post-implementation review found, of the 290,000 completed transfers:

2,400 transfers were given at least one amber flag. 96% of these did proceed to transfer whilst 4% did not. 57% of these transfers were flagged as ‘overseas investments are included in the scheme’.
300 transfers were given at least one red flag, 5% of which were flagged because the member has been offered an incentive to make the transfer.

36. As shown below, over a million transfers took place in the 18-month review with only a small fraction reporting an amber flag. However it is important to note the DWP data collection captures a significant, but not complete, part of the market and therefore has limitations when applying trends and assumptions to the whole market.

Table 1: Data from the 18-month post-implementation review of the 2021 legislation

	DWP Data Collection	External Source	Market Representation of DWP data collection
Number of amber flag appointments	2,400	10,500^{[footnote 22]}	23%
Number of transfers	287,500	1,100,000^{[footnote 23]}	26%
Membership size	10,000,000	60,000,000^{[footnote 24]}	17%

Data from MaPS

37. Data shows during the post-implementation review, there were a total of 10,500 appointments with MaPS in relation to transfers. Of the appointments where the member knew the cause of the flag, 64% were reported as the cause being the ‘overseas investments’ amber flag.

38. When assessing the impacts, the analysis uses the number and type of amber flag appointments to estimate the number of overseas flags across the market. This is to reflect that many members do not know the reason for their transfer being flagged. The number and type of transfers from the review are used to capture the scale of impact of these amendments.

Monetised impacts to business and households

Table 2a: Monetised impact to business – Equivalent Annual Net Direct Cost to Business (EANDCB)

Discounted direct costs and benefits to businesses over ten-year appraisal period

Direct Impact	Overview	Cost/Benefit– (discounted, 2026 prices)
	Direct Costs to business
One-off costs	Familiarisation, Assessing reputable schemes	£0.4 million
Ongoing costs	Establishing employment link for SSAS transfers	£0.1 million
	Direct Benefits to business
Benefits to Pension Schemes	Removal of overseas flag	£1.5 million
Benefits to Pension Schemes	Removal of repeat pension safeguarding appointments	£0.1 million
Benefits to Pension Schemes	Widening the scope of the first condition for pension transfers	£14.7 million
	EANDCB	-£1.8 million (net benefit)

Table 2b: Monetised impact to households – Equivalent Annual Net Direct Cost to Households (EANDCB)

Discounted direct costs and benefits to households over ten-year appraisal period

Direct Impact	Overview	Cost/Benefit – (discounted, 2026 prices)
	Direct Costs to pensioner members
Ongoing cost	Providing evidence of an employment link with a Small Self-Administered Scheme	£0.01 million
	Direct Benefits to pensioner members
Benefits to Pension Members	Removal of overseas flag	£1.4 million
Benefits to Pension Members	Removal of repeat pension safeguarding appointments	£0.1 million
Benefits to Pension Members	Widening the scope of the first condition for pension transfers	£3.9 million
Benefits to Pension Members	Prevention of pension fraud from transfers into Single Self-Administered Schemes	£2.0 million
	EANDCH	-£0.9 million (net benefit)

Table 3: Summary Table of overall monetised impacts (net monetised welfare impact)

Discounted costs and benefits over ten-year appraisal period

Impact	Overview	Cost/Benefit – (discounted, 2026 prices)
	Costs to business
One-off costs	Familiarisation, Assessing reputable schemes	£0.4 million
Ongoing costs	Establishing employment link for SSAS transfers	£0.1 million
	Costs to households
Costs to members	Providing evidence of employment link for SSAS transfers	£0.01 million
	Benefits to business
Benefits to Pension Schemes	Removal of overseas flag	£1.5 million
Benefits to Pension Schemes	Removal of repeat pension safeguarding appointments	£0.1 million
Benefits to Pension Schemes	Widening the scope of the first condition for pension transfers	£14.7 million
	Benefits to households
Benefits to pensioner members	Removal of overseas flag	£1.4 million
Benefits to pensioner members	Removal of repeat pension safeguarding appointments	£0.1 million
Benefits to pensioner members	Widening the scope of the first condition for pension transfers	£3.9 million
Benefits to pensioner members	Prevention of SSAS pension fraud from new red flag	£2.0 million
	Net Present Social Value (NPSV)	£23.3 million

Non-monetised impacts

Table 4: An overview of key non-monetised impacts estimated

Cost/Benefit	Impacted	Description
Benefit	Money and Pensions Service (MaPS)	The removal of the overseas flag is estimated to result in fewer unnecessary appointments; MaPS will therefore be able to reallocate resource to other key services.
Benefit	Police	The proposed regulations are expected to lead to fewer cases of pension fraud, and therefore, fewer cases that the police will have to investigate. This will allow the police department to reallocate resources to other key areas.
Benefit	Regulators	Fewer cases of pension fraud to examine and explore, giving them the opportunity to focus on other regulatory aspects in the pensions market.
Benefit	Pensioner members	Reductions in opportunity cost of losses to pension fraud, emotional harm and lost economic output.

Monetised and non-monetised costs and benefits

39. There are a number of amendments to the legislation proposed by the Department (see paragraph 20). The costs and benefits estimated below consider potential interactions between the measures but are presented net of any interactions.

40. This Options Assessment utilises a number of assumptions and builds on from the legislation to help trustees ensure that transfers of pension savings are made to safe and not fraudulent schemes impact assessment,[^{[footnote 25]} including:

Updated wage costs. The wage cost for industry used throughout this impact assessment is £38.94 per hour which reflects £30.66^{[footnote 26]} average wage for a corporate manager and director plus the 27% uplift^{[footnote 27]} to account for non-wage costs.
Updated individual wage costs to reflect increases in average wages since the previous impact assessment. This is used to monetise the value of time for pensioner members in line with the methodology from the previous impact assessment. The wage cost for pensioner members used throughout this impact assessment is the average wage of £17.96.^{[footnote 28]}
Updated cost of sending out a letter to £2.00 based on data from Royal Mail^{[footnote 29]} and the rejected postal votes impact assessment.^{[footnote 30]}
Gathering of new data on the types of flags and transfers to inform the 18-month review.^{[footnote 31]} This data is used to capture the scale of impact of these amendments.
Engagement with a small number of industry representatives to create new assumptions.

Monetised costs

41. The direct costs of the amended legislation are:

Familiarisation with the new policy and regulatory changes.
Additional administrative burden and due diligence with the new red flag where a transfer is proposed into a SSAS and the member is unable to demonstrate a verifiable employment link with the receiving scheme.

Impact on schemes and administrators: One-off familiarisation costs

42. A total familiarisation cost to schemes and administrators is estimated to be approximately £367,000 (in 2026 prices). This is estimated by:

Data estimated 84% of trust-based schemes with 12+ members and 64% of schemes with 2-11 members self-administer their scheme rather than use a service provider.^{[footnote 32]}
This ratio is applied to the number of schemes in the market.^{[footnote 33]}
- Therefore around 660 schemes are estimated to self-administer and around 130 use a service provider. For micro schemes (2-11 members), 15,700 self-administer and 8,700 are estimated to use a service provider. From previous estimates, it is assumed there are still 200 unique service providers for DC trust-based schemes.
The Pensions Protection Fund (PPF) estimate there are around 4,800 private sector Defined Benefit (DB) schemes.^{[footnote 34]} Around 80% of these schemes use a service provider. As many service providers administer both DC and DB schemes, familiarisation for these schemes is already accounted for by the unique service providers. Therefore, only around 1,000 self-administered DB schemes will need to undertake familiarisation.
It is estimated there are around 90 contract-based providers.^{[footnote 35]}
As the amendments are short and schemes have already familiarised with the regulations, the estimated time to familiarise is short. It was previously estimated based on industry engagement of around one hour. This has been halved given the small number of changes made.
Given a wage of £38.94 per hour for a pension administrator (with the larger administrators needing 5 individuals), this gives an estimated cost of around £367,000.

43. Table 5 provides a breakdown of familiarisation costs by scheme type, wage, number of staff and time required

Table 5: Estimated familiarisation costs^{[footnote 36]}

	Number of schemes	Staff	Time (hours)	Wage (hourly)	Total Cost (2026 prices)
Trust-based service providers	200	5	0.5	£38.94	£19,000
Trust based self-administered schemes	16,300	1	0.5	£38.94	£318,000
Contract-based service providers	100	5	0.5	£38.94	£10,000
Self-Administered DB Schemes	1,000	1	0.5	£38.94	£20,000
				Total	£367,000

Impact on schemes and administrators: One-off cost assessing schemes are reputable

44. It is estimated there will be a one-off cost of approximately £15,400 (2026 prices) for revising the burden of proof for the first condition. Pension schemes and administrators can assess which schemes can be considered ‘reputable’ (that is, destination providers that the transferring scheme does not believe will present a risk). Based on industry engagement, it is estimated the vast majority of schemes and service providers already have knowledge of which schemes are ‘reputable’ with common business practice that they update this knowledge frequently. The majority of schemes will therefore already have the information that will require them to make the decision on the ‘balance of probabilities’ that the transfer will not lead to a scam.

45. The additional cost is based on:

It is estimated 10% of schemes and service providers will need to develop new knowledge around which schemes are reputable. This assumption is highly uncertain and is based on a small number of conversations with industry, recognising a small number may not have a complete, latest list of providers.
As the market is consolidating (rather than expanding) and based on discussions with industry, is it assumed once schemes have developed their understanding of reputable schemes initially, any additional cost going forward will be negligible (as few schemes will be created).

46. Table 6 provides a cost breakdown of developing knowledge around reputable schemes by scheme type, wage, number of staff and time required.

Table 6: Estimated cost of assessing whether pension schemes are ‘reputable’

	Number of schemes (rounded to the nearest 10)	Staff	Time (hours)	Wage (per hour)	Total Cost (2026 prices)
Trust-based service providers	20	1	2	£38.94	£1,600
Trust based self-administered schemes	70	1	2	£38.94	£5,200
Contract-based service providers	10	1	2	£38.94	£700
Self-Administered DB Schemes	100	1	2	£38.94	£7,900
				Total	£15,400

Impact on schemes and administrators: additional administrative burden and due diligence to establish a genuine transfer into a Single Self-Administered Scheme

47. Where members seek to transfer into a SSAS, schemes will have to establish verifiable employment link with the receiving scheme to ensure the transfer is genuine and not at risk of fraud. This is expected to result in additional due diligence and additional administrative burden cost of £3,900 per year. This is based on the following:

TPR’s Occupational defined contribution landscape in the UK 2025 outlines the number of micro schemes by RSS (relevant small scheme) status – these are Small Self-Administered Schemes. There are currently around 21,260 RSS schemes^{[footnote 37]} (an increase from 20,720 in 2024) with around 60,000 members – around three members per scheme.
By observing the fluctuation in RSSs over the past three years (2023, 2024 and 2025) and assuming around three members per scheme, a yearly average of the number of transfers into SSASs can be calculated to be 160. Given that data from Report Fraud alongside other assumptions used in this Options Assessment covered elsewhere suggests a lower volume of transfers per year, as well as the fact that some new RSSs may initially have fewer than three members, it is assumed there are 100 transfers into SSASs each year. This is uncertain but is built on the best available data and the magnitude is unlikely to be significantly different.
To establish a verifiable employment link when a member seeks to transfer into a SSAS, this is assumed to take 1 hour, with only one pension administrator required. This is a low expected cost given it should be easy to obtain the relevant information to demonstrate this. Given a wage of £38.94 per hour assumed for a pension administrator, the total cost for schemes is estimated to be approximately £3,900 per year (2026 prices).

Table 7: Summary of monetised costs to pension schemes

Impact	Overview	Cost (discounted, 2026 prices)
	Costs to business
One-off cost	Familiarisation	£367,000
One-off cost	Assessing reputable schemes	£15,400
Ongoing costs	Establishing employment link for SSAS transfers	£33,500 over 10 years (£3,900 per year)
	Total cost	£0.4 million over 10 years

Monetised benefits

Impact on schemes and administrators: removal of overseas flag

48. It is estimated the removal of the overseas flag should save schemes and administrators approximately £177,000 each year. This is based on:

The average between two data sources of the number of overseas flags from the data collection (5,985) and the number from MaPS (6,720) to estimate the number of transfers with an overseas flag in 2022 at around 6,400.
It is estimated around 10% of these transfers flagged as overseas may have been flagged anyway under a different type of flag. This assumption is highly uncertain and is based on a small number of discussions with experts in industry. This would result in 5,700 fewer transfers per year being flagged as overseas.
It is estimated 20% of these transfers will instead go through as the First Condition and 80% would go through as the Second Condition. This is in line with how transfers were proceeding in our 2022 data collection with a slight increase in the First Condition given the widened scope following these regulatory changes. .
Under the First Condition, it is expected schemes and administers will no longer need to send out a letter to a member to seek an appointment (0.33 hours) or look through documentation the member may have sent (0.5 hours). Based on average administration wage costs (£38.94 per hour), this provides a cost saving per transfer of approximately £59.^{[footnote 38]}
Under the Second Condition, it is expected schemes and administers will no longer need to send out a letter to a member to seek an appointment (0.33 hours) or look through documentation that the member has sought guidance (0.25 hours). Based on average wage costs, this provides a cost saving per transfer of approximately £25.^{[footnote 39]}
It is therefore estimated approximately 1,100 transfers that would have been flagged as overseas will now go ahead through condition 1 at a total cost saving to schemes of around £65,000 per year.
It is therefore estimated approximately 4,600 transfers that would have been flagged as overseas will now go ahead through condition 2 at a total cost saving to schemes of around £112,000 per year.

Table 8: Estimated cost saving to schemes and administrators from the removal of the overseas flag

	Number of transfers	Cost saving per transfer	Total Cost saving (2026 prices)
Transfer that previously were assigned the overseas flag now progressing under Condition 1	1,100	£59	£65,000
Transfer that previously were assigned the overseas flag overseas flags now progressing as Condition 2	4,600	£25	£112,000
		Total	£177,000

Impact on schemes and administrators: removal of repeat pension safeguarding appointments

49. It is estimated schemes and administrators will save approximately £8,000 per year from the removal of repeat appointments where a member transfers more than once within a 12-month period. This is based on:

Data from MaPS showing a total of 10,500 pension safeguarding appointments in 2022.
Insights from MaPS suggest around 5% of these may have been repeat appointments (meaning an estimate of around 525 per year).
For these transfers, schemes will no longer need to send out a letter to members asking them to attend an appointment (0.33 hours), they will only need to look through the documentation/evidence provided by the member (0.25 hours).

Based on the average wage costs and time assumptions, this generates a cost saving of £15 per transfer.^{[footnote 40]}

Table 9: Estimated cost saving to schemes from the removal of repeat pension safeguarding appointments

	Number	Cost saving per transfers	Total cost saving per year (2026 prices)
Repeat appointments	525	£14.85	£7,800
		Total	£7,800

Impact on schemes and administrators: widening scope of First Condition

50. It is estimated schemes and administrators will save around £1,710,000 each year due to the widening scope of First Condition from the changes being made to regulation 6(1) and regulation (7). This is based on:

The data collection exercise carried out to inform the 18-month review of the regulations in 2022 was representative of around 26% of the pension transfer market. Overall, this data collection looked at 290,000 completed transfers however only 130,000 transfers were able to distinguish between the First Condition and the Second Condition.
Table 10 provides breakdowns for transfers in 2022 with “unknowns” being proportionately distributed across the categories. Please note these breakdowns are highly sensitive and is based on the small sample of schemes that took part in the review. They may not therefore reflect what individual schemes may be experiencing.

Table 10: Breakdown of transfers based on DWP’s 2022 data collection exercise

	Data Collection	Market representation	Number (Whole market)	Proportion of transfers
First Condition	8,800	26%	34,000	3%
Second Condition where no flags are present	260,600	26%	1,000,000	91%
Number of transfers with at least one amber flag	2,400	26%	9,000	1%
Number of transfers with at least one red flag	300	26%	1,100	0%
Number of contractual/discretionary transfers	15,600	26%	59,000	5%
Total Transfers	287,500	26%	1,100,000	100%

Based on engagement with industry, it is estimated around 5% of transfers that would have gone ahead as the Second Condition will now be able to go ahead as the First Condition. Based on 2022 data, this is approximately 50,000 transfers
Of these 50,000 transfers, schemes and administrators will no longer need to send out a questionnaire to members requesting additional due diligence checks (0.83 hours) delivering a saving of around £34 per transfer

Table 11: Estimated cost saving to schemes and administrators from widening the scope of the First Condition

	Estimated number of additional First Condition transfers (per year)	Cost saving (per transfer)	Total cost saved (per year)
Widening scope of condition one to include ‘reputable’ schemes	49,800	£34.32	£1,710,000
		Total	£1,710,000

Impact on schemes and administrators: Legitimate schemes continue to receive charge revenue from members’ pension pots

51. The new red flag will be used where there is no demonstrable employment link for a transfer into a SSAS to prevent SSASs being used as a vehicle for pension fraud. Therefore, where a transfer into a SSAS will be stopped in order to prevent pension fraud, the original legitimate scheme will benefit from continuing to receive charge revenue on the member’s pension pot. This is expected to result in a benefit for schemes of £1,900 per year. This is calculated through:

The Reporting of Pension Fraud and Small Self-Administered Schemes (SSAS) to Report Fraud FY2024-25 report^{[footnote 41]} shared by Report Fraud and the City of London Police found between 2017 and 2025, there were 62 reports of pension fraud submitted that related to SSAS transfers. This results in around eight reports submitted per year around transfers into SSASs that resulted in pension fraud. However, the report acknowledged the actual figure of SSAS fraud is likely to be higher but that there are limitations in terms of the reporting. Therefore, in the absence of any other data, it is assumed only half of victims report once they are subject to pension fraud, with industry reporting half of the remaining unreported cases by the victim. Therefore, it is estimated that there are 10 occurrences of pension fraud per year relating to SSAS transfers. This is highly uncertain and based on limited data.
The same report found there were over 500 pension frauds reported across both pension and investment Home Office Counting Rules. Over 380 reports identified an average financial loss per victim of £18,400. A further 140 reports were identified amongst investment fraud reporting codes pertaining to pension fraud. Where an investment has been identified as the vehicle for the loss of a pension, the figure increases to an average financial loss of £38,400. Using a weighted average of these reports, it is estimated that the average pension pot value that results in pension fraud due to a SSAS transfer is around £23,800.
Schemes charge, on average, around 0.3%^{[footnote 42]} on pension pots. Therefore, a legitimate scheme that prevents a transfer into a fraudulent SSAS will benefit from additional charge revenue of around £71 per member. Given that it is estimated that around 10 transfers into SSASs per year result in pension fraud, this results in a benefit for schemes of £700 per year.

Table 12: Summary of benefits to pension schemes

Impact	Overview	Benefit (discounted, 2026 prices)
	Benefits to business
Benefits to Pension Schemes	Removal of overseas flag	£1.5 million over 10 years (£180,000 per year)
Benefits to Pension Schemes	Removal of repeat pension safeguarding appointments	£70,000 (£8,000 per year)
Benefits to Pension Schemes	Widening the scope of the first condition for pension transfers	£14.7 million over 10 years (£1.7 million per year)
Benefits to Pension Schemes	Legitimate schemes continue to receive charge revenue from members’ pension pots	£6,000 over 10 years (£700 per year)
	Total benefit	£16.3 million over 10 years (£1.9 million per year)

Impacts on members

Monetised Costs

Impact on pension scheme members: providing evidence of an employment link with a Small Self-Administered Scheme

52. Just as schemes are estimated to accrue an additional administrative cost where members seek to transfer into a SSAS, it is expected there will be a cost to members. In the process of establishing a verifiable employment link with the members and the SSAS receiving a transfer, members may be expected to provide supporting documentation to their scheme in order to facilitate the transfer. This process of providing evidence of an employment link is estimated to take 30 minutes on average for each member. Based on average wage cost in the UK (£17.96 per hour)^{[footnote 43]} and the estimated 100 transfers into SSASs per year, providing evidence of an employment link with this a SSAS is estimated to cost members £900 per year.

Table 13: Summary of monetised costs to pensioner members

Impact	Overview	Cost (discounted, 2026 prices)
	Costs to pensioner members
Ongoing cost	Providing evidence of an employment link with a Small Self-Administered Scheme	£8,000 over 10 years (£900 per year)
	Total cost	£8,000 over 10 years (£900 per year)

Monetised Benefits

Impact on pension scheme members: removal of the overseas flag

53. It is estimated the removal of the overseas flag will lead to a cost saving for pension scheme members of around £164,000 per year. This is based on the following:

In line with paragraph 16, there will be around 5,700 pension transfers per year that no longer have an overseas amber flag raised.
It is estimated 20% of these transfers will instead go through as the First Condition and 80% would go through as the Second Condition. This is in line with how transfers were proceeding in the data collection with an increase in the First Condition given the widened scope following these regulatory changes.
Where a transfer goes through as the First Condition, members will no longer need to attend a MaPS appointment (1 hour), demonstrate they have attended an appointment (0.5 hours), nor need to respond to a questionnaire undergoing condition 2 due diligence checks (0.5 hours). Using average wage costs this delivers a saving of around £36 per transfer.^{[footnote 44]}
Where a transfer goes through as the Second Condition, it is expected members will no longer need to attend a MaPS appointment (1 hour) or demonstrate that they have attended an appointment (0.5 hours). This delivers a cost saving per transfer of approximately £27^{[footnote 45]} Please refer to paragraph 40 to see monetisation of the value of time for pension scheme members.
Around 1,100 transfers that would have been flagged as overseas will now go ahead through condition 1 at a total cost saving to pension scheme members of around £41,000 per year.
Around 4,600 transfers that would have been flagged as overseas will now go ahead through condition 2 at a total cost saving to pension scheme members of around £123,000 per year.

54. The removal of the overseas flag could reduce the total benefit for some members if the amendment means they now proceed with the transfer and are charged for transferring their pension. However, data from the 18-month review shows that 96% of transfers with at least one amber flag proceeded to transfer following a pension safeguarding appointment.

Impact on pension scheme members: removal of repeat appointments

55. It is estimated pension scheme members will save around £9,400 per year on the removal of repeat appointments. This is based on:

In line with paragraph 49, it is estimated that there are approximately 525 repeat appointments per year based on current data.
These members will no longer be required to attend multiple pension safeguarding appointments (1 hour).
They will only be required to demonstrate that they have already attended one (0.5 hours). This generates a saving of around £18 per transfer leading to an overall cost saving of approximately £9,400 per year. Please refer to paragraph 40 to see how the value of time for pension scheme members has been monetised.

Impact on pension scheme members: widening scope of the First Condition

56. It is estimated the widening scope of the First Condition will lead to a cost saving for members of around £447,000 per year. This is based on:

In line with paragraph 50, around 50,000 transfers each year will now go ahead as the First Condition instead of the Second Condition as a result of changes to these regulations.
For pension transfers impacted by this amendment, it is expected that members will no longer be required to fill out an additional Second Condition due diligence check questionnaire (0.5 hours). This generates a time saving of around £9 per transfer leading to a total cost saving of £447,000. Please refer to paragraph 40 to see how the value of time for pension scheme members has been monetised.

57. These amendments have been developed following extensive engagement across the industry to develop a set of changes that do not risk undermining the original policy intent which is to protect the member. Therefore, whilst the First Condition amendments allow more transfers to proceed through as the First Condition, there is no expectation this will increase the risk of a scam occurring. This is because schemes have the experience to recognise which schemes are ‘reputable’ and where this may not be the case on the ‘balance of probabilities’, an adequate level of due diligence is still required meaning the member is not at any greater risk of a scam.

Impact on pension scheme members: prevention of pension fraud from transfers into Single Self-Administered Schemes

58. Where a transfer into a SSAS is stopped in order to prevent pension fraud, the member, while being prevented from the transfer they were seeking, will benefit by retaining their pension wealth and not falling victim of fraud. This is expected to result in a benefit for members of £238,000 per year. This is calculated in the following way:

As outlined previously, around 10 transfers are expected to be SSAS scams based on available data.
The average loss is estimated at £23,800 (based on Report Fraud data).
The prevention of these estimates would result in members benefiting from retaining their pension wealth in the scale of £238,000 per year.

Table 14: Summary of benefits to pensioner members

Impact	Overview	Benefit (discounted, 2026 prices)
	Benefits to pensioner members
Benefits to Pension Members	Removal of overseas flag	£1.4 million over 10 years (£164,000 per year)
Benefits to Pension Members	Removal of repeat pension safeguarding appointments	£0.1 million over 10 years (£9,400 per year)
Benefits to Pension Members	Widening the scope of the first condition for pension transfers	£3.9 million over 10 years (£447,000 per year)
Benefits to Pension Members	Prevention of pension fraud from transfers into Single Self-Administered Schemes	£2.0 million over 10 years (£238,000 per year)
	Total benefit	£7.4 million over 10 years (£0.9 million per year)

Wider impacts and Non-monetised benefits

Impact on employers

59. There should be no significant impact on employers as a result of the amendments to the regulations. This is because employers are currently required to supply the member with information where they need an employment earnings link. The requirement to demonstrate an employment link to a transfer into a SSAS should result in a minimal cost given SSAS members are often the company Director and therefore will have information available to demonstrate this.

Impact on wider public services

60. The amendments to the regulations are expected to result in significant savings within the wider public service sector. This includes:

Savings and benefits to the Money and Pensions Service (MaPS). The removal of the overseas flag is estimated to result in 5,700 fewer amber flag appointments, while there is estimated to be around 530 less appointments due to the changes around repeat appointments. MaPS will therefore be able to reallocate resource to other key services and improve the efficiency of their service.
Savings and benefits to the authorities such as the police department. The amendments to the regulations are expected to lead to fewer cases of pension fraud, and therefore, fewer cases that the police will have to investigate. This will allow the police department to reallocate resources to other key areas.
Savings and benefits to regulators. Bodies such as The Pensions Regulator will have fewer cases of pension fraud to examine and explore, giving them the opportunity to focus on other regulatory aspects in the pensions market. Fewer instances of pension fraud will also increase trust in regulators.

Societal impacts

61. As outlined in the Economic and Social Costs of Fraud report.^{[footnote 46]} there are a wider range of impacts individuals – and families – may face as a result of fraud and scams. Reducing the likelihood of this happening should result in wider societal impacts. For example, the report highlights impacts such as:

Opportunity cost of losses: There are other costs because of the losses incurred by individuals from incidents of fraud, such as missed investment opportunities or further impacts on consumption levels of individuals.
Emotional harm: Fraud does not cause direct physical harm to victims but can inflict significant psychological harm.
Lost output: There may be a reduction in economic activity when an individual becomes a victim of a crime. This section estimates the cost of lost productivity for fraud victims who may proceed to take time off work and potentially be less productive for some time after.

Impact on pension transfer times

62. Qualitative feedback received during the 18-month review process showed that pension transfers are taking longer than is required due to the additional due diligence checks resulting from the overseas flag and longer waiting times for a pension safeguarding appointment. Waiting time for a pension safeguarding appointment increased from 2 to 6 weeks. These amendments will reduce pension transfer times for some transfers going forward, creating time savings for savers.

63. For defined benefit pension transfers, it means there may be less chance of a pension members cash equivalent transfer value (CETV) becoming outdated. CETVs are usually guaranteed for at least three months and so this impact is likely minimal.

Question 8

8. Monitoring and evaluation of preferred option

Accepted Answer

64. The Work and Pension Select Committee (WPSC) recommended that a review of Occupational and Personal Pension Schemes (Conditions for Transfers) Regulation 2021 should be published within 18 months of the regulations being operational and every three years thereafter.

65. The first review of the regulations was published in June 2023. The feedback and data gathered during the review resulted in the amendments discussed in this impact assessment.

66. The Department will continue to work with The Pension Regulator and pensions industry to understand and review the impact on the pension transfer market following the proposed amendments, while continuing to be alert to evolving methods of pension scams.

67. There are also a number of existing surveys, such as the Financial Lives Survey, which ask about fraud and scams in relation to pensions – these will be monitored closely for trends.

Question 9

9. Minimising administrative and compliance costs for preferred option

Accepted Answer

68. These proposed amendments to the regulations taken as a whole are designed to reduce the compliance costs for businesses, building on feedback received as part of a comprehensive post-implementation review. There are clear savings to businesses from reducing the friction they currently face around the existing regulations. In addition, the overall costs are low and proportionate.

Question 10

Declaration

Accepted Answer

Department: Department for Work and Pensions (DWP)

Contact details for enquiries: AdamMohiyuddin.Sheriwala@dwp.gov.uk

Senior responsible officer: Laura Adelman

I have read the Options Assessment and I am satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impact of the leading options.

Signed: Laura Adelman

Date: 7 May 2026

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