What does 2020 hold for Pensions?

Thinking of transferring your UK pension in 2020?

We take a look at a number of changes taking place and things you might need to be aware of in the UK pension world in 2020.


  • Defined Benefit transfers over £30,000 harder to transfer
  • UK Lifetime allowance increased to £1.073m for 2020-2021 year
  • Investment pathways for non-advised UK customers
  • QROPS Overseas Transfer Charge
  • Crack down on pension scammers hiding behind QROPS verification
  • UK state pension age rises to 66

Defined Benefit Transfers Over £30,000 Harder to Transfer

Many UK Financial Conduct Authority (FCA) Advisers have stopped giving advice in the Defined Benefit transfer sector as Professional Indemnity (PI) insurers are refusing to cover this advice. This follows the FCA making it compulsory from 2016 for anyone wanting to transfer out of a Final Salary or Defined Benefit (DB) Scheme, which has a transfer value of over £30,000, to obtain FCA advice prior to transferring.

The regulation is part of the FCA’s growing effort to crack down on what it believes is poor advice in the Defined Benefit transfer sector.

UK Lifetime Allowance Increased for 2020-2021 Year

From April 2020 the lifetime allowance (LTA) will increase to £1.073m. The LTA applies to the total of all the pensions you have, including the value of pensions promised through any Defined Benefit schemes you belong to, but excluding your State Pension.


Investment Pathways for Non-Advised UK Customers

From August 2020 investment pathways will be introduced with the aim to stop UK people defaulting to cash, and help them to make a sensible investment decision. This applies to UK Customers who are starting a new drawdown plan and have not received advice.

Customers who meet the criteria will be given a choice of four different pathways depending on their objectives:

  • no plans to touch their money
  • set up a guaranteed annuity
  • start taking a drawdown income or,
  • withdraw all their funds.

QROPS Overseas Transfer Charge

An overseas transfer charge has been introduced to deter people from transferring pensions out of the UK, purely for UK tax avoidance reasons.

Pension transfers to QROPS which were requested on or after 9th March 2017 could be subject to an overseas transfer charge if one of the five conditions are not met which includes whether you are a resident in the same country in which the receiving QROPS is established.

The overseas transfer charge is 25% on the value of the pension transfer.

Cross-agency Approach to Pension Scammers

A UK Daily Mail investigation, released January 2020, exposed how savers lost up to £10bn in UK schemes registered with HMRC and the Pensions Regulator and therefore recognized as QROPS*.

HM Revenue & Customs (HMRC) say they will continue to come down hard on pension scammers and announced they will be working closely with the Pensions Regulator and Financial Conduct Authority (FCA) in a cross-agency approach.

*Qualified Recognised Overseas Pension Schemes 

UK State Pension Age Rises to 66

This year will see the UK State Pension finish rising to 66. From October 2020 you’ll need to be at least 66 to get a UK State Pension – whatever your gender.