Don’t fall for false promises of pension liberators

26th April 2013

A top pension consultancy has warned investors not to fall for the false promises of pension liberators but says their numbers are growing.

Fraser Smart, managing director Europe of Buck Consultants, has warned of the dangers posed by bogus pension liberators, how to spot them and how to avoid them.

“There has been an increased focus on pensions liberation schemes this year.  With all the regulators taking increased interest in pensions liberation activity.  The Pensions Regulator has also launched a highly visible awareness campaign with literature featuring a large picture of a scorpion on the front and headings such as “Predators stalk your pension”. If you are sent an unsolicited message think of the scorpion,” Smart says.

“Unfortunately this year has seen a significant increase in companies singling out savers and claiming they can help you cash your pension early.  There are limited cases where it is possible, but the vast majority of such claims will turn out to be bogus with serious tax consequences for you.”

Smart has put together a few useful pointers.

– You should be particularly suspicious if you are approached out of the blue over the telephone or via a text message. The best advice is to simply not reply and never give out personal information or financial information to a cold caller. Remember if it sounds too good to be true, it probably is.”

– Never rush into a pension transfer, for if you make a transfer to a pension liberation arrangement, even in good faith, you are risking tax charges and penalties of more than half the value of your pension savings. The only people getting rich are the fraudsters and you will get an unpleasant tax bill.”

–  If you have been tempted by one of these offers don’t accept the assurances of those involved in the transaction, get the advice of an independent IFA who is not involved in the transaction and not  linked to the organisation offering you the deal.

– In some cases, checking addresses of advisers and schemes on Google Maps Street View should start alarm bells ringing. If the premises looks dodgy, or is it obviously a mail box company, ask yourself why! And what are the odds if the money disappears of getting it back?

Smart adds: “Pensions liberation has never been more in the spotlight and, if you have been unlucky enough to make an illegal transfer, the odds  of the tax man not finding out have never been smaller.  I know that Buck is in almost daily contact with one regulator or another over pensions liberation matters.”

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