Proposed pension transfer changes: what they mean for your clients and your processes

What you need to know

Proposed changes from the Department for Work and Pensions (DWP) aim to reduce delays in low-risk pension transfers while strengthening protections against scams.

For you, the impact is clear: mainstream transfers should become smoother, but SSAS transfers may require more planning and evidence.

Low-risk transfers could move faster

The DWP proposes expanding the “first condition” so more transfers can proceed without additional checks.

Instead of limiting this to certain scheme types, trustees and scheme managers would have discretion to decide whether a receiving scheme is low risk.

Why this matters for you:

• established pension providers and mainstream SIPPs could fall within this low-risk category;
• fewer transfers would need to go through the full assessment; and
• clients could experience faster, more straightforward transfers.

This flexibility should improve efficiency – but different schemes may apply different standards, so outcomes may vary.

Fewer unnecessary amber flags

The proposal to remove overseas investments as a standalone amber flag addresses a common friction point.

Originally designed to identify high-risk investments, the current rule can also capture legitimate strategies – such as FCA-regulated global equity funds – simply because they include overseas exposure.

What changes for you and your clients:

• fewer transfers should be flagged unnecessarily;
• less need for MoneyHelper safeguarding appointments; and
• reduced delays in consolidation and diversified investment strategies.

This should help you keep transfers moving where there is no genuine scam risk.

A simpler approach to MoneyHelper appointments

Under current rules, clients consolidating multiple pensions may need separate MoneyHelper appointments for each transfer.

The DWP proposes allowing one appointment to cover multiple transfers within a 12 month period.

The benefit:

• a more streamlined process for you and your clients;
• fewer administrative steps; and
• a smoother consolidation experience without weakening safeguards.

SSAS transfers face closer scrutiny

While most changes reduce friction, the position for Small Self-Administered Schemes (SSASs) is less favourable.

SSASs are unlikely to benefit from the expanded first condition and will continue to face greater scrutiny.

What this means in practice:

• transfers into SSASs may take longer; and
• more evidence will be required to satisfy trustees.

Stricter employment link requirements could block transfers

The most significant change for SSASs is a tougher approach to the employment link test.

Currently, insufficient evidence creates an amber flag, meaning a transfer can still proceed after guidance. The proposal would escalate this to a red flag – removing the client’s statutory right to transfer.

Proposed evidence requirements include:

• a schedule of employer contributions covering at least three months;
• proof that those contributions have been paid; and
• documentation confirming the employment relationship.
• documents showing salary paid (payslips) and received into the member's bank account (bank statements) for the three months before the transfer request.

The challenge:

Many SSAS members are directors or business owners, where contributions are often irregular. In these cases, the required evidence may not exist – even where the arrangement is legitimate.

This creates a real risk that genuine transfers could be blocked.

What you should do now

If these proposals are implemented, you can expect improvements for many clients – but additional planning for others.

Focus your next steps on:

• Reviewing SIPP transfers: expect faster processing and fewer interventions.
• Reducing delays: take advantage of fewer amber flags and streamlined guidance requirements.
• Planning for SSAS cases: consider building a clear contribution history early where future transfers are likely.
• Setting expectations: help clients understand where transfers may still face delays or additional scrutiny.

What to watch

The consultation is open until 21 July 2026. If adopted, these changes would represent the most significant update to transfer regulations since 2021.

The direction is clear:

• smoother processes for low-risk, mainstream transfers; and
• tighter controls for higher-risk structures, particularly SSASs.