Was your Aegon UK pension transfer refused? You’re not alone – many customers who dreamed of retiring in a quaint French village or to a vibrant town in sunny Spain suddenly found themselves ‘red-flagged’ by a system that made no sense and left them unable to access their life savings.

So, what’s a ‘red flag’?

Anyone who is a non-UK resident and who wants to transfer their pensions overseas must first receive independent financial advice from an FCA-regulated firm. However, UK-based advisory firms cannot provide their services to anyone who is outside the UK. 

This created a paradox, people trying to access their pensions overseas cannot receive UK-regulated advice, but the provider will not accept advice from anyone who isn’t UK-regulated. 

You might think, given the clear contradiction in the situation and the conundrum it poses for people overseas, that there would have been some support and guidance made available to help people navigate the process. Especially when (even in normal circumstances) the processes around pensions can be complex and confusing. Think again.

Aegon UK Pension, for example, blocked anyone who attempted to transfer their pensions overseas (using a local adviser) with a ‘red flag’ that allowed them to withhold their customers funds. This was a real problem – customers were living in (or in the process of moving to) another country and facing the frightening prospect of not being able to access the savings that would support them in their retirement. 

Why did this happen?

Back in November 2021, the UK government introduced legislation to help combat pension fraud and that would prevent people from losing their life savings to scammers. The new measures they introduced meant pension providers had to now comply with strict safeguarding requirements – one of the measures introduced for pension transfers was the traffic-light flagging system. 

So what did these flags mean?

• 🟢 Green flags: all fine! The ceding/receiving schemes have been verified and everything can proceed as normal
• 🟠 Amber Flags: further information required
• 🔴 Red flags: refused

The logic behind the new traffic-light system was sound – to make it as hard as possible for criminals to prey on people during the vulnerable process of transferring their pensions outside the UK. There were, however, glaring inconsistencies in the measures that had been introduced – specifically with amber and red flags (see the above example).

Further issues arose when providers, like Aegon, misinterpreted and then applied that legislation in overly-strict, one-size-fits-all policies that ultimately disregarded the nuance of individual situations and ended up taking away their customers freedom of choice – contrary to plan holders’ right to control and have access to their pensions. 

Even when the FCA eventually made it clear that the requirement to be FCA-authorised did not extend to non-UK advisors – we’ve seen instances of Aegon continuing to red-flag their customers transfer requests, despite them having received genuine advice and otherwise fully satisfying the requirements outlined by the regulator. 

Aegon UK Pension – What’s changed?

Now – there’s room for compromise. If you transfer a pension overseas using a non-UK advisor you will find that you’re no longer automatically red-flagged, but instead given an ‘amber flag’ and will then be given the option to have an appointment with Moneyhelper – a free advice service from the Money and Pensions Service. 

After a brief chat – you will be provided with a unique reference number which you can then give to the ceding-providers to show you have received appropriate advice and want to proceed. 

You can find the Moneyhelper safeguarding appointment booking system here. 

You’ll then be on the home straight to having full access to your pensions from your new country of residence.

Aegon UK Pension Red Flags – Where does Harrison Brook come in?

Here at Harrison Brook we specialise in providing financial advice for expats living outside the UK all around the world. Our advice is honest and impartial – we are not remunerated from commissions but fee based and motivated by providing a good service that has our clients best interests at heart. 

If you’ve had issues with getting your Aegon UK pension transferred in the past or were previously ‘red flagged’ – please get in touch with us using this form. We have FCA-compliant solutions available that would allow people looking to retire outside the UK full flexi-access drawdown – your ambitions of retiring abroad could soon become a reality. 

If you have any further questions about the above do not hesitate to get in touch with us.