Five questions about: Pension liberation

Aren't these schemes that allow me to get at my pension pot early?

Sort of. Pension liberation schemes encourage people to access their pension savings before the age of 55. But anyone who does so could end up falling foul of UK tax laws and end up with a huge bill and much less cash. It's estimated that up to 70 per cent of any cash released early from a pension could be owed to the tax authorities.

So I should avoid them?

Almost certainly. Firms that offer pension liberation hope to pocket fat fees - up to a fifth of your pot - for giving you misleading advice.

Shouldn't they be stopped?

HM Revenue & Customs is trying to stamp out the dodgy firms. This week it changed the rules to make it much harder for pension liberation to happen.

What have they done?

In short, schemes will no longer be automatically registered to receive funds. The Revenue said: "The changes aim to detect, disrupt and deter promoters of pension liberation schemes and ensure that individuals are aware of the true tax position."

So that's good news?

It is. Despite its many cock-ups and problems, HMRC does actually try and play fair with taxpayers and does sometimes get things right.