Pensions liberation means the early access to pension money by a member where such access would not normally be granted i.e. a member receiving a cash payment from the scheme before the normal minimum age of 55.

Thousands of people are estimated to have released up to £400m into high risk and non-existent investment schemes, many of which are based overseas.

Liberation can take place without the knowledge of the scheme trustees.

Types of liberation

Liberation tends to take one of the following forms:

  1. Loans offered to a member, usually on the basis that tax free cash will settle the loan with consequent low or very artificial repayment methods attached to it.  The transfer value is generally used to purchase “preference shares” and the company provides liquidity to a “third party” loan company or draws up a private agreement between itself and the members.
  2. The introducer receives commission from the scheme upon completion and payment of the transfer value and passes some of the commission back to the member. The commission can vary greatly but can be up to 30%.
  3. The scheme takes the direct approach and pays cash to the members at an unauthorised age.


  • Those operating these schemes are often unregulated by the FCA. Check if they are FCA registered.
  • Beware investments that are mainly in the “unregulated space” or abroad.
  • Pensions liberation schemes appear to be conventional occupational or personal pension schemes that are registered with HMRC, but many are not registered or only newly registered, so check whether and when the scheme was registered.
  • The value of transfers being paid tend to be low, typically £30,000 to £40,000, but can sometimes be as low as £7,000. Keep an eye out for disproportionate commissions or admin/transfer fees.
  • Check whether members have been approached unsolicited.
  • Beware cases where the member is pressurising the trustees/administrators for a quick transfer.
  • Do your due diligence!

Courtesy of Compliance Monitor