Open consultation

Protecting Pension Savers - Proposals to Amend the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021

Published 9 June 2026

Applies to England, Scotland and Wales

Ministerial foreword

The loss of pension savings, whether through decisions made under pressure or through explicit fraud, can be financially and emotionally devastating. Data from Report Fraud shows the terrible impact pension fraud has on victims, the average financial loss in 2024 to 2025 was £18,400, and where an investment was identified as the primary vehicle for pension fraud, as is commonly observed in case studies relating to Small Self-Administered Schemes (SSASs), the average loss per victim increases drastically to £38,400.

The scale of the impact of pensions fraud lay behind the introduction of the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021. This has delivered stronger safeguards. But there is more to do, as levels of Defined Contribution (DC) savings grow and the pensions landscape continues to evolve, increasing pot sizes make pension savings a more attractive target for scammers. Fraudsters are adapting their tactics accordingly, and Government must stay one step ahead to ensure robust protection for pension savers and take decisive action against fraud wherever it occurs.

While we recognise that SSASs make up only a very small minority of the pensions market, emerging evidence suggests that SSASs may be more vulnerable to the potential for fraudulent misuse. We are therefore acting to update safeguards against such fraud. This Government will not tolerate pension fraud, and I remain steadfast in my commitment to protecting pension savers and pursuing those who seek to exploit them.

This consultation sets out targeted measures to address the risk of fraud within SSASs and marks the first step in a wider, ongoing Government programme to tackle pension fraud, in alignment with the Government Fraud Strategy 2026 to 2029. The programme’s broader aim is not only to strengthen protections for pension savers, but also to reinforce the mechanisms through which risks are monitored, fraudulent activity is detected, and to ensure those responsible are identified and face the full force of the law.

Work is already progressing across Government, regulators, law-enforcement partners and industry to understand emerging threats and limit avenues for misuse. I expect to build on this engagement over the course of the coming year and should further measures be required we will implement them.

As part of ensuring our approach to tackling pension fraud is effective, this consultation also proposes targeted changes to transfer conditions to address operational issues raised by trustees, administrators and savers themselves.

I invite all those who share this Governments determination to build a safer, more resilient pensions system to engage with this consultation. Your insights will help shape an environment that protects savers from harm and ensures fraudulent activity is identified early and stopped in its tracks.

Thank you for taking the time to contribute.  

Minister for Pensions 

Torsten Bell

Introduction

The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 were introduced to give trustees and scheme managers the tools they need to intervene where there is a risk of scam activity, while still ensuring that the vast majority of legitimate transfers can proceed smoothly. The Regulations establish a framework of statutory conditions and risk indicators designed to protect members from pension scams.

The Regulations were made under delegated powers which enable the Secretary of State to update and refine the framework through further secondary legislation, either to tighten processes or to respond to changing scam methodologies. This allows the Government to act in the face of emerging threats in the pensions market and to make necessary procedural improvements without requiring primary legislation.

The Department for Work and Pensions (DWP), in partnership with the pensions regulators, have reviewed how the Regulations are operating in practice, drawing on evidence from industry, casework, and wider insight.

This work has identified areas where targeted amendments would strengthen the effectiveness and clarity of the transfer conditions, including a specific response to an emerging risk and a set of procedural refinements addressing operational issues raised by trustees and administrators.

The changes proposed in Chapters 1 and 2 set out the policy detail behind these amendments, Annex A includes draft regulations in line with the proposals.

This consultation marks the first stage in a broader programme of work relating to pension scams and pension transfers. The immediate focus is addressing scam risks, but later this year the programme will explore wider pension transfer issues such as how processes can be modernised and how savers who choose to transfer their pensions are enabled to make well informed decisions, while maintaining the robust protections needed to defend against evolving scams risks. The recent Financial Conduct Authority (FCA) consultation CP25/39: Adapting our requirements for a changing pensions market, invited feedback on one potential way of supporting those decisions. We recognise the value of a joined-up approach across the market and will continue to work with the FCA as it analyses the feedback to that consultation and the findings from its research and testing.

About this consultation

Who this consultation is aimed at

Everyone, but we would particularly welcome responses from:

• pension scheme trustees
• pension scheme managers and service providers, other industry bodies and professionals
• pension scheme members
• groups representing pension scheme members
• groups representing anti-fraud initiatives
• pension scheme administrators

Purpose of the consultation

This document sets out DWP’s proposed amendments to the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021.

These proposals follow the Department’s review of the regulations, which examined how the transfer conditions were operating in practice. It collected data across four calendar quarters, covering approximately 290,000 completed transfers, and was published in June 2023. More recent analysis by the Pension Scams Action Group has since identified emerging scam methodologies and highlighted a new area of risk. Taken together, these insights have informed the targeted amendments proposed in this consultation.

Scope of the consultation

This consultation applies to England, Scotland, and Wales. Occupational pensions are a devolved matter for Northern Ireland, and we are working closely with counterparts in Northern Ireland at the Department for Communities in relation to the matters set out in this consultation.

Duration of the consultation

The consultation period begins on 9 June 2026 and will run until 21 July 2026.

How to respond to this consultation

Please send your consultation responses via email to:  caxtonhouse.privatepensionsprotectingsaversconsultationresponses@dwp.gov.uk.

Government response

We will aim to publish the government response to the consultation on the GOV.UK website.

How we consult

Consultation principles

This consultation is being conducted in line with the revised Cabinet Office consultation principles published in March 2018. These principles give clear guidance to government departments on conducting consultations.

Feedback on the consultation process

We value your feedback on how well we consult.  If you have any comments about the consultation process (as opposed to comments about the issues which are the subject of the consultation), please email them to the DWP Consultation Coordinator. These could include if you feel that the consultation does not adhere to the values expressed in the consultation principles or that the process could be improved.

DWP Consultation Coordinator
2nd Floor
Caxton House
Tothill Street
London
SW1H 9NA

Email: caxtonhouse.legislation@dwp.gov.uk

Freedom of information

The information you send us may need to be passed to colleagues within DWP, published in a summary of responses received and referred to in the published consultation report.

All information contained in your response, including personal information, may be subject to publication or disclosure if requested under the Freedom of Information Act 2000. By providing personal information for the purposes of the public consultation exercise, it is understood that you consent to its disclosure and publication. If this is not the case, you should limit any personal information provided or remove it completely. If you want the information in your response to the consultation to be kept confidential, you should explain why as part of your response, although we cannot guarantee to do this.

To find out more about the general principles of Freedom of Information and how it is applied within DWP, please contact the Central Freedom of Information Team by email at freedom-of-information-request@dwp.gov.uk.

The Central Freedom of Information team cannot advise on specific consultation exercises, only on Freedom of Information issues. Read more information about the Freedom of Information Act.

Chapter one: Risks and trends in Small Self-Administered Schemes operations

Background

1. SSASs are a form of occupational pension scheme typically established by company directors for themselves and key employees. They offer significant 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. There are currently around 60,000 SSAS savers across 21,000 schemes, reflecting a small but important part of the pensions landscape.

2. However, there is emerging concern that the SSAS model may be vulnerable to those seeking to abuse the system. While many providers operate responsibly, some recent evidence shows that limited oversight may have enabled poor practices and, in some cases, the possibility of deliberate and organised misuse. This Government has zero tolerance for such abuse.

3. Work undertaken by DWP and partner organisations indicates emerging evidence that some savers may have been exposed to high‑risk or unregulated practices involving the misuse of dormant SSASs, investments in non‑standard assets, and arrangements seeking to present pension liberation activity as legitimate investment opportunities. In recent years, it is estimated that there are on average over 100 transfers into SSASs per year. Up to 1-in-10 of these could be a transfer involving fraud, 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. We have seen the devastating impact on individuals’ pension savings, often built up over decades, leaving some without the financial security they were relying on in retirement at a time when cost-of-living pressures have increased.

4. While not representative of the SSAS sector as a whole, such cases highlight patterns that may expose savers to harm where oversight is bypassed, or the nature and quality of the underlying investment are uncertain. Taken together, these findings suggest that certain behaviours and investment approaches within a segment of SSAS activity may merit closer and more robust monitoring.

Government position and next steps

5. The government is unequivocal: there is no place for fraud or exploitation within the pension system. The risks identified in the SSAS landscape present a need for decisive action. This work represents the first stage of a planned programme of work that reflects our determination to tackle pension scams, tighten controls, and restore SSASs to their intended purpose as flexible retirement vehicles for legitimate users, closing down avenues for abuse.

Policy

6. We propose to amend the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021, which already establish a safeguarding framework to protect members from pension scams through the use of red and amber flags to indicate potential risk.

7. The proposed amendments will seek to address emerging SSAS concerns by including a targeted change to introduce a new red flag where a transfer is proposed and the evidence provided does not demonstrate an employment link with the receiving occupational pension scheme.

8. 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 scheme providers to refuse the transfer, helping to ensure that SSASs are used only for their intended, lawful functions and denying fraudsters opportunities to exploit the system.

9. Regulation 8(5) will be amended to provide that a red flag will be present where the trustees or managers of the transferring scheme determine that, although the member has provided the evidence requested, that evidence does not demonstrate an employment link between the member and the receiving scheme. This represents a change from the current position, where such cases may only give rise to an amber flag, and 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.

Question 1

Do you foresee any issues with the planned wording of the flag in regulation 8 of Annex A? 

Question 2

Are you aware of any emerging concerns, risks or scam activity, such as those arising in SSASs or other pension arrangements, where existing consumer protections or regulatory safeguards may not be sufficient?

Question 3

Do you consider the focus on the employment link to be an appropriate and effective measure for addressing the concerns relating to SSAS transfers?

Chapter two: Protecting savers, improving transfers

Background

10. Following Royal Assent of the Pension Schemes Act in 2021, the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 came into force in November 2021. These Regulations were introduced to strengthen the system’s defences against pension scams and to ensure that trustees and scheme managers have statutory powers to intervene where there is evidence of risk.

11. Under the Regulations, trustees and scheme managers may refuse a transfer where a red flag indicates a significant likelihood of a scam, such as unsolicited contact designed to pressure a saver into transferring. Amber flags apply where there may be scam risk, but circumstances could also be legitimate, for example where fee structures appear unclear or disproportionately high. In such cases, savers must take guidance from the Money and Pensions Service (MaPS) before proceeding

Review of the regulations

12. DWP committed to reviewing the Regulations to ensure they were delivering strong protections without creating unnecessary barriers for savers or schemes.

13. The review drew on 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 defined benefit (DB) and defined contribution (DC) markets, providing a broad and representative view of emerging trends. Data collected covered approximately 290,000 completed transfers.

What the review found

14. There was broad consensus from industry that the Regulations remain fit for purpose and have played a key role in creating a safer transfer environment. Trustees and scheme managers confirmed that the framework gives them the confidence to intervene where concerns arise. It is estimated that the Regulations have prevented around 2,000 transfers potentially involving fraud, demonstrating their value as an effective anti‑scams measure.

15. However, the review also highlighted operational challenges that, while well‑intentioned, may have at times created unnecessary friction for legitimate transfers. These included:

16. A narrow interpretation of the First Condition, meaning trustees sometimes had to carry out additional due diligence despite having no scam concerns.

• inconsistent application of the incentives flag, which may have incorrectly blocked some transfers

• the overseas investment amber flag triggering where there may have been no indicators of scam activity

• savers being required to attend multiple guidance appointments when consolidating several pots, which may have added burden without improving protection

• DWP also noted that these issues may have contributed to increased waiting times for MaPS safeguarding appointments

Insights from other sources

17. Further work with MaPS, The Pensions Regulator (TPR), and industry partners confirmed these themes. As of 2025, over a third of safeguarding appointments were triggered solely by the overseas investment amber flag. Member representative groups also highlighted the impact on savers, noting that repeated appointments during consolidation added little value from a protection standpoint.

18. Trustees and industry stakeholders expressed concerns that the current framework can restrict their discretion, preventing them from exercising experienced judgement in straightforward cases where scam risk is demonstrably low.

A smoother, stronger system

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

Policy

Revising Regulation 6(1)

20. This amendment relates to Condition 1 of the framework and reflects findings from the review, which identified that the criteria for meeting Condition 1 may be too narrowly drawn. As a result, trustees may be required to assess transfers under Condition 2, even in circumstances where they have no concerns that the receiving scheme may pose a risk.

21. Under the existing provisions, for the First Condition to be satisfied trustees must be satisfied beyond reasonable doubt that the transfer is to a specified type of receiving scheme. The amendment to regulation 6(1) broadens this position by introducing that the First Condition may also be met where trustees are satisfied, on the balance of probabilities, that the transfer is to a ‘reputable’ pension scheme.

Broadening Regulation 7(3) and (4)

22. These are consequential amendments to the revision of regulation 6(1).  The amendments add “any reputable pension scheme” to 7(3) (while 7(4)(c) clarifies that this is a scheme that the trustees consider to be reputable) to those able to satisfy the First Condition, enabling trustees to proceed confidently with transfers where they know there is no fraud risk.

23. Regulation 8(2) previously provided that the Second Condition will apply where the First Condition does not apply, but now provides that that the Second Condition will apply where the first condition is not satisfied. This is also consequential to the change at 6(1).

24. It is proposed that the Regulations include a non‑exhaustive list of factors to which trustees and scheme managers may have regard when assessing whether a receiving scheme is reputable as part of their due diligence. This is intended to support effective decision‑making and to balance appropriate protections for members.

These factors are likely to include, but are not limited to:

• whether there is an existing relationship with the receiving scheme
• the nature and risk profile of the scheme’s investments
• any prior warning flags or regulatory concerns
• the level of transparency around fees and charges

Question 4

Do you agree with this proposed approach, including the use of a non-exhaustive list of factors? If so, we would welcome your views on what those factors should be. We also welcome your input, including any evidence-based views, on its effectiveness and practical workability.

Amending Regulation 9(1A)

25. Members who have taken MaPS guidance within the last 12 months will be exempt from repeating it when consolidating multiple pots, aiming to remove unnecessary duplication and improve the member experience.

Removing the Overseas Investment Amber Flag (Regulation 10(5)(d))

26. This change reflects the reality that many legitimate schemes include overseas investments. Regulation 9(5)(a)–(c) already requires trustees to assess whether the receiving scheme includes high‑risk or unregulated investments, or unclear, complex or unorthodox investment structures. These indicators provide protection against the types of scam risk that the overseas investments amber flag was intended to address, allowing this flag to be removed without reducing saver protection.

Incentives flag

27. While we recognise the calls made during the review to remove the incentives red flag in Regulation 8(5)(c), and we acknowledge that incentives may form part of legitimate business models in some parts of the market, extensive engagement with industry, legal advisers, and pension regulators, alongside close consideration of available scams insight, has led us to conclude that this provision remains an important and effective scams indicator.

28. The incentives red flag is consistent with prevailing scam methodologies and provides a precise protection which, if removed or diluted, would not be adequately replicated elsewhere in the Regulations or through any alternative mechanism.

29. The Government’s primary concern is safeguarding members against the risk of pension scams and, in light of the continued evidential value of the incentives indicator, it would not be appropriate to make changes in this area. However, the proposed broadening of Condition One will give trustees greater discretion to proceed with a transfer without engaging Regulation 8(5)(c) where they are satisfied that the receiving scheme is safe and that the transfer destination presents no identifiable risk of a scam

Implementing support

30. DWP will continue to work closely with the Money and Pensions Service (MaPS), The Pensions Regulator (TPR), and industry stakeholders to support the effective operation of the amended Regulations. This will include updating guidance where appropriate to ensure that robust protections against pension scams are maintained, while enabling processes to operate in a smoother and more proportionate way for both members and schemes.

31. DWP will also continue to engage with industry to assess how the Regulations are working in practice. This may include reviewing data on the volume of pension transfers taking place, the number of transfers where red or amber flags are identified, and the factors driving the use of those flags, to ensure that the framework remains targeted, effective, and responsive over time.

Question 5

Do you foresee any issues in the practical implementation of the amended regulations?

Question 6

Do you foresee any issues with the proposed wording of the amendments to the regulations, as detailed in Annex A?

Annex A - draft regulations

Statutory Instruments

2026 No. 00

Pensions

The Occupational and Personal Pension Schemes (Conditions for Transfers) (Amendment) Regulations 2026

Made………………………………

Laid before Parliament …………………………..

Coming into force

The Secretary of State makes these Regulations in exercise of the powers conferred by sections 95(6ZA) to (6ZC), 101F(5A) to (5C), 182(2) and 183(1) of the Pension Schemes Act 1993 Act(a)^{[footnote 1]}.

In accordance with section 185(1) of the Pension Schemes Act 1993(b),^{[footnote 2]} the Secretary of State has consulted such persons as the Secretary of State considers appropriate.

Citation, commencement and extent

1.—(1) These Regulations may be cited as the Occupational and Personal Pension Schemes (Conditions for Transfers) (Amendment) Regulations 2026.

(2) These Regulations come into force on [xx].

(3) These Regulations extend to England and Wales and Scotland.

Amendment of the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021

2.—(1) The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021(c)^{[footnote 3]} are amended as follows.

(2) In regulation 6 (standards of proof, relevant evidence or information, and timing for decisions regarding satisfaction of the conditions) for paragraph (1) substitute—

“(1) In order for the trustees or managers of the transferring scheme to decide that the First Condition is satisfied, they must satisfy themselves—

(a) beyond reasonable doubt either that the receiving scheme is established, or listed as authorised, as set out in regulation 7(4)(a) or (b); or

(b) on the balance of probabilities that the receiving scheme is a reputable scheme as set out in regulation 7(4)(c).”.

(3) In regulation 7 (the First Condition: transfers into certain receiving schemes)—

(a) in paragraph (3), after sub-paragraph (c), insert “;

(d) any reputable pension scheme as set out in regulation 7(4)(c)”;

(b) for paragraph (4) substitute—

“(4) The First Condition is satisfied where the trustees or managers of the transferring scheme have satisfied themselves that the receiving scheme—

(a) is established, in the case of sub-paragraph (a) of paragraph (3);

(b) is listed as authorised by the Pensions Regulator, in the case of sub-paragraph (b) or (c) of paragraph (3), in accordance with the legislation referred to in the relevant sub-paragraph; or

(c) is one that the trustees or managers of the transferring scheme consider is a reputable scheme, in the case of sub-paragraph (d) of paragraph (3).”.

(4) In regulation 8 (the Second Condition: transfers into all other receiving schemes)—

(a) in paragraph (2)—

(i) after “transfers” omit “to” and insert “for” ;

(ii) for “does not apply” substitute “is not satisfied”;

(b) in paragraph (5)—

(i) omit the “or” after sub-paragraph (c);

(ii) after sub-paragraph (d) insert “; or

(e) the member has provided all the evidence required by regulation 10(1)(a) or (c) to demonstrate the employment link but the evidence does not demonstrate the employment link between the member and the receiving scheme”.

(5) In regulation 9 (the Second Condition: requirement to take specified guidance)—

(a) in paragraph (1)(a), at the beginning insert “subject to paragraph (1A)”;

(b) after paragraph (1)(b) insert—

“(1A) A member may not be required to take the specified guidance where the member provides the specified evidence confirming that they have taken the specified guidance within the period of 12 months ending with the date the trustees or managers of the transferring scheme received the request.”;

(c) in paragraph (4), omit sub-paragraph (a);

(d) in paragraph (5) omit sub-paragraph (d);

(e) in paragraph (9) omit the definition of “overseas”;

(f) in paragraph (10) omit “, “overseas””.

Signed by authority of the Secretary of State for Work and Pensions

[ADDRESS]
[DATE]

[NAME]
[Parliamentary Under Secretary of State]
Department for Work and Pensions

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 (S.I.2021/1237) (“the 2021 Regulations”). The 2021 Regulations prescribe conditions for pension transfers.

Regulation 7 of the 2021 Regulations sets out the First Condition for pension transfers. It applies to a transfer into a scheme (“a receiving scheme”) that falls within one of the types set out in regulation 7(3) of the 2021 Regulations. Regulation 2(3) amends regulation 7(3) of the 2021 Regulations to include, as an additional type, a reputable pension scheme. Regulation 2(3) also amends Regulation 7(4) of the 2021 Regulation to provide that the First Condition is satisfied if the trustees or managers consider the scheme to be reputable. Regulation 2(2) amends regulation 6(1) of the 2021 Regulations so that the trustees or managers must be satisfied that the scheme is reputable on the balance of probabilities.

Regulation 8 of the 2021 Regulations sets out the Second Condition. Regulation 2(4) amends the wording in regulation 8(2) to provide that the Second Condition applies to all transfers where the First Condition is not satisfied. In order for the Second Condition to be satisfied the trustees or managers of the transferring scheme must decide that none of the red flags set out in 8(4) and 8(5) of the 2021 Regulations are present in respect of the transfer. Regulation 2(4) amends regulation 8(5) of the 2021 Regulations to make provision for a new red flag to be present if the member provides all the evidence of an employment link required by regulation 10(1) of the 2021 Regulations, but the trustees or managers of the transferring scheme decide that this does not demonstrate an employment link between the member and the receiving scheme. The amber flag that previously covered this scenario is removed by regulation 2(5)(c).

Regulation 9 of the 2021 Regulations provides that if the trustees or managers of the transferring scheme decide that any of the amber flags set out in that regulation 9 are present, the member must take pension transfer scams guidance from the Money and Pensions Service (“MaPS”). Regulation 2(5) amends regulation 9 of the 2021 Regulations so as to provide that a member may not be required to take MaPS guidance if that member evidences that they have taken MaPS guidance within 12 months ending with the date the transfer request was received.

Paragraph 2(5) also amends regulation 9 of the 2021 Regulations so that overseas investments in a receiving scheme will no longer be an “amber flag”.

A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, public or voluntary sectors is foreseen.

1. (a) 1993 c. 48. Section 95(6ZA) to (6ZC) was inserted by section 125(2) of the Pension Schemes Act 2021 (c. 1). Section 101F was inserted by section 37 of the Welfare Reform and Pensions Act 1999 (c. 30) and subsections (5A) to (5C) were inserted by section 125(6) of the Pension Schemes Act 2021. See section 181(1) for the meaning given to “prescribe” and “regulations”. Section 183(1) was amended by paragraph 1 of Part III and paragraph 1 of Part IV of Schedule 7 to the Pensions Act 1995 ↩

2. Section 185 was amended by paragraph 46 of Schedule 2, paragraph 80(a) of Schedule 5, and Part I of Schedule 7 to the Pensions Act 1995 ↩

3. S.I. 2021/1237 ↩