Statutory Right To Transfer Final Salary Pension Removed? Everything You Need To Know!

The government has enacted regulations to limit individuals’ statutory transfer rights in certain circumstances, with the goal of assisting trustees in preventing fraudulent transfers. The legislation applies to applications for DB transfer value statements of entitlement or DC transfer requests submitted on or after November 30, 2021.

As a result, the legislation imposes new obligations on trustees to determine whether a statutory transfer right exists in certain circumstances. Before a statutory transfer can be made, yes-or-no decisions must be made about whether certain criteria have been met or, in some cases, are likely to be met. Schemes with discretionary transfer powers may still be able to use that power if necessary.


As the Pension Transfer Specialist, Cameron James always thrive to provide you with the latest updates from the UK Pension Industry. Watch the video below to understand everything you need to understand as explained by our CEO and Independent Financial Advisor, Dominic James Murray.

How Do These Rules Affect QROPS?

The implementation of these rules will have a significant impact on QROPS. You will have to demonstrate your residency in the country where the QROPS was established. Malta now has 95% of all QROPS. However, Malta has a small population. As a result, we’re not sure why the government is attempting to require someone to prove their residency in the country of their QROPS.

Perhaps it demonstrates that HMRC hasn’t really thought this through. Anyone living in France, Germany, Switzerland, Portugal, Italy, or other countries who are approaching their lifetime allowance may use a QROPS to save tax and avoid unnecessary taxes on their pension pot. So, what will happen is that you will have to prove that you are a citizen of the country.

The Positive Side

So, let’s take a look at the bright side of this new regulation. The UK government and the Department of Work and Pensions (DWP) are attempting to protect investors from scams. They are attempting to protect the very few people who use a useless financial advisory firm.

The presence of an ‘amber flag’ indicates that the member should seek one-on-one MoneyHelper assistance. Remember that if there is an amber flag and the member does not demonstrate that they have followed MoneyHelper advice, there is then a red flag and no statutory transfer right. Following the completion of a guidance session, MoneyHelper will issue a confirmation with a unique reference number, which trustees must see before proceeding with the transfer.

If the receiving scheme is an occupational pension scheme, trustees must ask the member to demonstrate a genuine employment link using a variety of criteria. If it is a QROPS, the member will be asked to demonstrate either an employment link (if it is an occupational pension scheme) or, again using various criteria, a residency link to the relevant overseas jurisdiction.

An amber flag is displayed when:

  • The member provides a substantive but incomplete response to a request for evidence or information.
  • The trustees believe that some or all the evidence provided may be falsified or was not provided directly by the member.
  • There is no evidence of an employment or residency link (only applicable for transfers to an Occupational pension scheme or a QROPS).
  • The receiving scheme includes any high-risk or unregulated investments.
  • The receiving scheme charges any ambiguous or excessive fees.
  • The structure of the investments included in the receiving scheme is ambiguous, complex, or unconventional.
  • Any overseas investments are included in the receiving scheme.
  • The volume of transfer requests to the same scheme or involving the same adviser and/or firm of advisers has increased dramatically or unusually.

The Negative Side

When they make these rules, they affect the entire market. The UK pension industry is worth billions and billions and billions of pounds.

Certainly, the pension schemes in the United Kingdom do not want to lose hundreds of millions of transfers and CETVs. So, if they lobby the UK government to impose stricter rules, it could reduce the number of transfers, which means they get to keep your money for longer and earn money on it.

Now, the presence of a red flag indicates that there is no statutory transfer right. The red flags are displayed when (in broad terms):

  • The member has failed to respond substantively to a request for evidence or information.
  • In relation to the requested transfer, an unregulated person has performed a regulated activity.
  • The transfer request is being followed up on by an unsolicited contact via direct marketing.
  • The member has been offered a reward for making the transfer (other than by the trustees or employer).
  • The member has been, or believes they have been, under pressure to make the transfer.

How Cameron James Can Help You?

Whatever happens, these rules will remain in place. They’re going to be here for a long time. When the UK government implements rules like this, it is extremely rare for them to reverse their decision.

That means you’ll have to be on it with your financial adviser. You’ll need to drastically reduce the number of errors in your cases. Otherwise, you may find yourself working with a financial adviser for 3-6 months., you will pay £3,000 for your advice report, make a blunder on the application, and your transfer is still denied. We don’t even know what will happen next because the legislation is so new.

So, if you have any questions or would like to speak with one of our financial advisers one-on-one, you can contact us via WhatsApp or book an appointment through Calendly for a one-hour free initial consultation, which will be followed by a free initial advice report on what we believe is in your best interests and how to proceed from here.

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