Clarity from the Confusion – Pension Transfers

Since the new Pension Freedoms have been introduced there has been considerable confusion among the public, advisers and pension providers (the pension schemes themselves) about pension transfers.

Pension Transfers-Who can advise and what can they advise?

th June 2015, the FCA (Financial Conduct Authority) finally gave some clarification on pension transfers.

The new rules stated there is a requirement for all those transferring out of a final salary scheme with a transfer value of £30,000 or more to seek advice on the transfer.

However- The original legislation didn’t cover the level of advice required for pension transfers or what qualifications or licenced permissions the adviser or firm needed to give this advice. This led to a considerable amount of confusion and no one seemed to have the definitive answer.

Pension Transfers-The Old Rules

The FCA only required a pension transfer specialist (see definition below) to give advice where  pension transfers havebeen made from an occupational scheme (or a scheme with guaranteed minimum pensions) to a personal pension, stakeholder pension or Section 32 Buy Out .

If  pension transfers were not from occupational pensions to a personal pensions then they were called a pension switch and didn’t need a pension specialist to be involved.

Pension Transfers- The New Rules

There is now a new regulated activity of “advising on conversion or transfer of pension benefits”.

Guaranteed Annuity Rates– Many old pensions had guaranteed annuity rates at retirement that would be lost. Advising on amounts less than £30,000 funds will not require the advice of a pension specialist.

Immediate Vesting-In the past,if people transfered to take pension benefits immediately a pension specialist was not required. Due to the complexity of the new freedoms, this has changed and a pension specialist will need to be involved for these pension transfers.

Also, in the case of a transfer from a final salary scheme where benefits are not to be taken immediately, a pension specialist must undertake a transfer analysis.

Occupuational Pensions – Pension transfers from any occupational scheme with safeguarded benefits(guarantees) to another occupational scheme with flexible benefits will need the advice of a pension specialist, which would not have been the case previously .

However, pension transfers from  occupational schemes with no safeguarded benefits to  personal schemes with flexible benefits will now not require a pension specialist.

Benefits less than £30,000

The Pensions Scheme Act doesn’t require advice for members where the benefits in question are worth less than £30,000.

What is a Pension Specialist?

In this case, the only people that can advise are those with the following qualifications-

  • G60 or AF3- (Chartered Insurance Institute)
  • Fellow/Associate of the Faculty of Actuaries
  • Pensions paper of Professional Investment Certificate (IFS)
  • Fellow/Associate of the Pensions Management Institute



 The firm must be FCA regulated with specific permission to give pension transfer advice ( around 29% of UK firms ).

What does this mean for expats?

It basically means that any expat with a final salary scheme* or any kind of pension with a gurantee will need to get advice directly from a UK FCA regulated pension specialist or their existing adviser will need to seek to co-operate with the UK adviser.

This means that no offshore pension advice firm can call themselves specialists, nor independent in the UK, unless they have UK permissions and qualifications as laid down above for a pension specialist.


*Public Sector Pensions- can no longer be transferred.

The views expressed in this article are not to be construed as personal advice. You should contact a qualified and ideally regulated adviser in order to obtain up to date personal advice with regard to your own personal circumstances. If you do not then you are acting under your own authority and deemed “execution only”. The author does not except any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Where this article is dated then it is based on legislation as of the date. Legislation changes but articles are rarely updated, although sometimes a new article is written; so, please check for later articles or changes in legislation on official government websites, as this article should not be relied on in isolation.


About the Author

Chris Lean

Chris is a Chartered Financial Planner who writes blogs and articles to simplify and explain some of the financial issues that affect UK expats. Subjects include; hot topics, regulation and the ever-changing world of finance.

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