Have you reached an email or letter recently offering you the opportunity to make some quick cash by surrendering your pension plans early? In these cash-strapped times the offer of ready money may sound tempting, but the chances are the deal really is too good to be true.
A hard-hitting information campaign for consumers and pensions professionals has just been launched as part of an ongoing multi-agency crackdown on predators claiming to be able to release pensions cash as a loan or lump sum before the law allows.
According to The Pensions Regulator, the perpetrators often work alongside ‘introducers’ or ‘advisers’ who try to entice the public with spam text messages, cold calls or website promotions into transferring their existing workplace or private pension with the promise of being able to release a portion as cash before the age of 55.
People may be misled or not properly informed that tax charges and fees can erode their pension pot by more than half, leaving them with little to live on in retirement.
The remainder of their funds are likely to be invested in highly dubious and risky, unregulated investment structures, often based overseas.
The amount that has been ‘liberated’ from pension schemes in this way is known to be in the hundreds of millions of pounds, with thousands of members affected.
To combat this, The Pensions Regulator has worked with other agencies to produce information, carrying distinctive scorpion imagery, illustrating the threat to people’s pensions if they are taken in by such offers.
The new information includes:
A warning insert that administrators and pension providers will be asked to include in the information they provide to members who request a transfer of their pension.
A more detailed information leaflet for members looking to understand the consequences of these offers, which will be hosted on The Pensions Advisory Service website.
An action pack for pension professionals, including a checklist and examples of what to look out for.
Where administrators receive a transfer request and detect the warning signs of liberation, such as pension money being passed back to the member before age 55, they may wish to consider whether to make the transfer, and report their concerns to Action Fraud. The action pack includes more information to help them with this decision.
If you think you may have been a victim, or if you have information regarding pension liberation fraud, contact Action Fraud on 0300 123 2040.
