Under new HMRC UK regulations pension schemes are required to “carry out due diligence” for any UK pension transfer request.

What this equates to is a much more rigorous questioning of a member’s reason for transferring out and greater requests for information and documentation to prove the legitimacy of the transfer request i.e., that the member is not being scammed.

As part of this new process Schemes will check the transfer request against a checklist of conditions set out by the UK Pensions regulator.

In cases of transfers of UK pensions to Qualifying Recognised Overseas Pensions Schemes (QROPS) it is now a requirement that the scheme request evidence from the member to “either establish overseas residency or an employment link, depending on the member’s employment status.”

Failing to pass these checks may result in a “red flag” which means an immediate stop to the pension transfer process.

Even in cases where a “red flag” is not triggered a “amber flag,” an indication of potential risk with the pension’s transfer, will mean the member is required to obtain guidance from the MoneyHelper service before any further progress can be made on the transfer.