Normally a member can only take money from their pension once they're aged 55 or over. Some companies are marketing schemes claiming to let members gain early access to their pension pot by borrowing from the member's pension fund before they retire. This is commonly known as 'pension liberation' and can result in unauthorised payments being made from the pension scheme. Early access to pensions is rarely in anyone’s long-term financial interests, and can carry tax charges of more than half the unauthorised payment.
The Pensions Regulator, HM Revenue & Customs and Action Fraud are working together to combat such schemes and, following warnings last year about the dangers of entering into them, have joined forces to publish a set of leaflets about pension liberation offers that are being marketed.
The leaflets provide information aimed at members and trustees of registered pension schemes about the serious downsides of pension liberation arrangements, what trustees can do to reduce the risk of pension liberation, and the tax impact of releasing pension funds early using these types of arrangements. Follow the link below to download the leaflets.
If you want more information or are aware of anyone tempted to enter into such an arrangement please ask them to contact Action Fraud on 0300 123 2040 or the Pensions Helpline on 0845 600 2622.