The UK Government is proposing changes to the pension transfer “red and amber flag” rules introduced in 2021 to help protect pension savers from scams.
For people transferring a UK pension to a New Zealand QROPS, the proposals are potentially good news. In particular, the proposed changes to the UK pension transfer amber flag rules could reduce unnecessary delays for legitimate overseas pension transfers.
The proposals were published by the Department for Work and Pensions in June 2026 as part of its review of the pension transfer safeguarding regulations.
How does the UK pension transfer amber flag system work now?
When a UK pension scheme receives a transfer request, it must consider whether there are warning signs suggesting that the transfer could involve a pension scam.
A red flag can result in the member losing their statutory right to transfer. Examples include evidence of pressure to transfer, certain unsolicited approaches, or involvement by someone carrying out regulated activities without the appropriate permissions.
A UK pension transfer amber flag does not normally stop the transfer. Instead, the member must usually attend a pension safeguarding appointment with MoneyHelper before the transfer can proceed. The Pensions Regulator explains the current red and amber flag transfer requirements.
For transfers to a QROPS, UK schemes can also require evidence that the member is resident in the same country as the receiving scheme. For somebody transferring a UK pension to New Zealand, this will normally mean demonstrating New Zealand residence.
Why are so many New Zealand QROPS transfers currently amber flagged?
In QROPSNZ’s experience, around 90% of the UK pension transfers we currently handle receive a UK pension transfer amber flag because the receiving scheme has overseas investments.
In most cases, there is nothing unusual or inherently high risk about those investments.
Most well-diversified New Zealand pension schemes will have exposure to international markets. A QROPS holding an S&P 500 tracker fund, for example, will automatically have exposure to major international companies such as Apple and NVIDIA.
Under the current rules, that overseas investment exposure can itself trigger a UK pension transfer amber flag.
At its most extreme, even an in-specie transfer of an S&P 500 tracker fund could be amber flagged where essentially the same investment moves from the member’s UK pension to the New Zealand QROPS without changing the underlying assets.
That illustrates one of the main problems with the existing rules: the UK pension transfer amber flag may be triggered by the location of perfectly conventional investments rather than by evidence of an actual pension scam risk.
What is changing?
In June 2026, the Department for Work and Pensions published proposals to amend the rules after finding that some parts of the current system were creating unnecessary friction for legitimate transfers.
Three proposed changes are particularly relevant to people transferring UK pensions to New Zealand.
1. The overseas investment amber flag would be removed
Under the existing rules, the presence of overseas investments within a receiving pension scheme can trigger a UK pension transfer amber flag.
The Government now accepts that overseas investments are commonplace in legitimate pension arrangements. Its proposed regulations would remove the overseas-investment amber flag while retaining checks for high-risk or unregulated investments and unusual or complex investment structures.
The Government’s own analysis found that, by 2025, more than a third of safeguarding appointments were being triggered solely by the overseas investment amber flag.
For New Zealand QROPS, this could be a significant change.
Because most established New Zealand schemes invest globally, removing the automatic overseas-investment UK pension transfer amber flag should materially reduce the number of transfers being referred for additional safeguarding purely because the portfolio includes international assets.
For readers unfamiliar with these schemes, our guide explains what a QROPS is and how it works.
2. Trustees could recognise a receiving scheme as “reputable”
Another important proposal is an expansion of the system’s First Condition.
The proposed regulations would allow transferring schemes to treat pension schemes they consider reputable as satisfying the First Condition, potentially avoiding some of the additional checks required under the current process.
Factors UK trustees could consider include an existing relationship with the receiving scheme, the nature of its investments, its regulatory history and the transparency of its fees and charges.
At present, New Zealand QROPS do not generally have formal relationships with UK pension providers that would allow them to benefit from such treatment.
However, that could develop relatively quickly.
The New Zealand QROPS market consists of a limited number of established schemes, some of which have been operating for more than 10 years within a highly regulated environment. Major UK pension providers also see repeated transfers to the same established New Zealand schemes.
Over time, that transfer history should give UK providers a significant body of information on which to assess the reputation, governance and track record of individual receiving schemes.
Exactly how UK providers will apply the proposed “reputable scheme” test to overseas schemes remains to be seen.
3. Repeat MoneyHelper appointments should reduce
Where a UK pension transfer amber flag does remain, somebody who can show that they completed the required MoneyHelper safeguarding guidance within the previous 12 months would generally not have to repeat the appointment when consolidating multiple pension pots.
This could make a meaningful difference for people transferring several UK pensions.
We recently saw one member transferring three separate UK pensions who was required to complete three MoneyHelper safeguarding calls within two weeks.
The calls covered substantially the same questions, even though the pensions were transferring to the same destination and the investments were similar to those the member already held within their UK pension arrangements.
From the member’s perspective, the repeated UK pension transfer amber flags were concerning and the three separate calls felt unnecessary.
MoneyHelper itself explains how amber flags can delay a pension transfer.
The proposed 12-month recognition period should remove much of this repetition while retaining the safeguarding process where a genuine risk has been identified.
Will the UK pension transfer amber flag changes make QROPS transfers easier?
For a conventional transfer by a New Zealand resident to an established New Zealand QROPS, the proposed changes appear more likely to reduce friction than increase it.
The most important change is likely to be removal of the overseas-investment UK pension transfer amber flag.
If approximately 90% of the transfers we currently see being amber flagged are caught for this reason, removing that trigger alone could significantly reduce the number of otherwise straightforward New Zealand QROPS transfers being referred for additional safeguarding.
The proposed ability for UK providers to recognise reputable receiving schemes could further streamline transfers to established New Zealand QROPS over time.
There are still several stages involved in moving a pension overseas. Our guide to the QROPS transfer process explains how a UK pension transfer to New Zealand typically works.
The Government is also tightening some areas of the rules where genuine scam concerns remain, but these changes are aimed at identifying higher-risk situations rather than making ordinary overseas pension transfers more difficult.
What is not changing?
These proposals relate to the anti-scam transfer process. They do not change the separate UK tax rules applying to QROPS transfers.
A New Zealand resident transferring to a New Zealand QROPS can generally avoid the 25% Overseas Transfer Charge where the relevant conditions are satisfied and the transfer is within their available Overseas Transfer Allowance. HMRC explains the current tax rules for transfers to overseas pension schemes.
We explain the New Zealand position in more detail in our guide to UK pension transfer to New Zealand tax rules.
Similarly, the receiving scheme still needs to meet the relevant UK requirements. HMRC maintains the official Recognised Overseas Pension Schemes notification list.
When will the new rules apply?
The consultation closed on 21 July 2026. Draft regulations have been published, but as at August 2026 no commencement date has been set.
The Government still needs to consider the consultation responses and finalise the legislation.
For somebody currently considering a transfer to New Zealand, there is therefore little reason to delay an otherwise suitable transfer simply in anticipation of the new rules. The existing regulations continue to apply until the changes take effect.
What do the UK pension transfer amber flag changes mean for New Zealand QROPS?
The direction of travel is encouraging.
The current system frequently catches perfectly conventional pension investments simply because they include overseas assets. For New Zealand QROPS, where international diversification is normal, that has resulted in a very high proportion of legitimate transfers receiving a UK pension transfer amber flag.
If the proposals are implemented substantially as drafted, the transfer process should become better at distinguishing between genuine scam risks and ordinary, well-established overseas pension arrangements.
For members transferring a UK pension to New Zealand, that should mean fewer unnecessary UK pension transfer amber flags, fewer repetitive MoneyHelper appointments and, over time, a more proportionate transfer process.
