The Pensions Regulator (the "Regulator") has joined with a number of other agencies, including HM Revenue & Customs ("HMRC") and Action Fraud, to launch an information campaign for consumers and pensions professional highlighting the issue of pension fraud. Bill Galvin, Chief Executive of the Pensions Regulator, wants the pensions industry to do what it can to protect members from pension liberation offers and has noted that providers who do not carry out due diligence before processing a transfer may be placing members at high risk.
This is part of ongoing attempts to crack down on companies offering pension liberation schemes, claiming to be able to release pensions cash as a loan or a lump sum before the law allows. Such schemes claim to let members obtain access to their pension monies before the statutory minimum pension age (which is normally 55) by "borrowing" from the pension fund before retirement. It is known that hundreds of millions of pounds have been "liberated" from pensions funds in this way and this can result in payments out of pension funds being found to be unauthorized payments which can carry tax charges of more than half the unauthorized payment.
To combat this, information has been produced which sets out the threat to a member's pension which includes:
- a warning insert which administrators and pension providers will be asked to include in the information they provide to members who request a transfer;
- a more detailed information leaflet for members setting out the consequences of such transfers; and
- an action pack for pensions professionals.
The pension liberation fraud action pack, transfer pack insert and awareness leaflet can be viewed by clicking HERE.