How you can help identify scams
Companies are singling out pension savers and claiming that they can help them access their pension cash early.
With demand for early access to pension savings going up, there is evidence that more members of the public are being duped into transferring their funds to rogue pension arrangements.
Pension liberation, also known as ‘pension loans’ and ‘pension scams’, is the transfer of a member’s pension savings to an arrangement that will allow them to access their funds before they are entitled to receive them. This activity can be fraudulent where members are not informed, or are misled, about the consequences of these schemes.
We call this activity ‘pension liberation fraud’ and members who agree to it could face a tax bill of more than half the value of their pension savings.
In some cases these arrangements appear to operate within the letter of the law, but they can still attract large tax charges and further penalties. Some are outright illegal.
Most of the time, people targeted by these scams are not informed of potential tax consequences. Only in rare cases, such as terminal illness, can members take a pension before age 55.
If you are associated to a pension scheme, then you may be able to help prevent members from becoming victims of this fraud.
To help you, The Pensions Regulator and other agencies have produced information about the threat of these offers:
- a warning insert for administrators and pension providers to include in the information they provide to members requesting a transfer
- a detailed information leaflet for members who want to understand the consequences of these offers
- an action pack for pension professionals, including a checklist and examples of what to look out for.
Be alert to pensions fraud and help stop pensions becoming prey.