Ministers, regulators and the pensions industry have held a high profile summit meeting to crack down on pension liberation fraud.
Operators of the schemes, who often use cold calling and text messaging to target pension savers, aim to persuade people to access their pension funds early, before the age of 55, by transferring their money to another arrangement.
In rare cases, such as terminal illness, it is possible to access pension funds before age 55. But in the vast majority of cases, pension liberation can result in tax charges and penalties of more than half the value of a member’s pension savings, with those being targeted rarely told about the potential tax implications.
On 12 September, the Pensions Regulator hosted a summit in London involving key players in the fight against pension liberation fraud, to discuss with pension providers and industry groups how to tackle the issue.
Minister for Pensions Steve Webb said: “By signing up to one of these schemes you will destroy your future retirement savings. The promise of easy money when times are tough is all too tempting, and there are far too many unscrupulous people who will prey upon this. If you are offered a deal to unlock your pension, don’t touch it.”
A cross-government taskforce including the Department for Work and Pensions, the Pensions Regulator, the Financial Conduct Authority, the Serious Fraud Office and others are working to combat pension liberation fraud.
