Warning over pensions access scams

Steve WebbA Government minister has issued a warning to the public to steer clear of dodgy pension schemes offering easy money, ahead of a summit this week to tackle the problem of pension liberation.

Work and Pensions Minister Steve Webb urged people to beware of offers to transfer their pension that sound "too good to be true".

Pension liberation schemes, whereby workers are offered early access to their savings by handing over their pensions in exchange for instant cash, often fail to point out that a possible 55% fee could end up with the taxman.

Mr Webb said: "Pension liberation fraud is a crime.

"That is why, as part of our plans to build a fairer society, we are working across government and industry to stamp it out and to raise awareness of the dangers of handing over your pension pot.

"By coming together this week we will look at what else could be done, including whether we may need to change the law.

"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. These people want your pension pot and if you are offered a deal to unlock your pension, don't touch it."

On Thursday a cross-Government taskforce will attend a summit in London, hosted by the Pensions Regulator, to discuss with pension providers and industry groups how to clampdown on schemes which put people's retirement savings at risk.

The Department for Work and Pensions and the Pensions Regulator will be joined by the Financial Conduct Authority and Serious Fraud Office to root out the fraudsters.

In rare cases, such as terminal illness, it is possible to access funds before age 55 from your current pension scheme. But for the majority, promises of early cash will be bogus and are likely to result in serious tax consequences.

Seven retirement nightmares

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