Five questions about: Pension liberation

 

What's that, a new political movement?

No, no. It's a scheme under which people can transfer retirement savings to an arrangement that allows them to get at their pension pot before the standard retirement age of 55.

Sounds great. Where do I sign up?

You don't. If anyone approaches you offering you the opportunity to liberate your pension, turn them down flat. It's almost certainly a scam that could cost you half your savings while the scamster will take a fat fee from you.

Can't anyone get their retirement cash early?

Only in very rare cases, such as people who have a terminal illness.

Why is this in the news?

Last week police swooped on a call centre in London, which they claimed was operating fraudulent pension liberation schemes. Several people were arrested in the first crackdown on the schemes.

How do they work?

People are told they can take their pension cash early. Fraudsters don't tell their victims of the tax implications. Effectively anyone taking pension cash early will lose tax benefits, which can add up to 55 per cent of the value of the pot. If you are offered pension liberation, contact Action Fraud on 0300 123 2040.

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