Thursday, 14 February 2013 10:26
The Pensions Regulator is working with pension administrators, employers and independent financial advisers to raise awareness of pension liberation fraud.
A number of SPPA customers have been contacted by companies who have been targeting savers with claims that they can help them take their pension cash early. In November 2012 the SPPA alerted customers of a pensions scam and have passed the details we have received on to the Pensions Regulator.
Pension liberation also known as pension loans and pension scams is a transfer of a scheme member's pension savings to an arrangement that will allow them to access their funds before the age 55. But accessing pension savings before minimum pension age is only possible in rare cases, like terminal illness. This activity can be fraudulent where individuals are not informed, or are misled, as to the consequences of entering into one of these schemes.
Pension liberation can result in tax charges and penalties of more than half the value of a member's pension savings, and those being targeted are usually not being told about the potential tax implications. This is in addition to high charges, typically 20 to 30% for entering into one of these arrangements and high risk investments for the remaining pension savings.