Project Bloom, a new multi-agency campaign, aims to help prevent a form of fraud in which members of the public are encouraged to access their pension before retirement, without being properly informed of the potentially severe tax consequences.
Pension liberation refers to pension scheme members transferring their savings to an arrangement which allows access to funds before the age of 55. While in rare cases – such as terminal illness – early access to funds is possible, for most people the likely result is a tax bill of more than half of the pension’s value.
When added to the fees charged by the companies offering the ‘service’, there may be little or none of the money left for retirement.
The perpetrators’ approach to pension scheme members is usually via unsolicited phone call or text message, with a pushy ‘advisor’ offering cash incentives, ‘loans’, a ‘savings advance’ or ‘cash back’ from the individual’s pension.
Five key tips
As well as providing information to pension professionals, the campaign offers five key tips to help members of the public avoid becoming victims:
- Never give out financial or personal information to a cold caller.
- Find out about the company’s background through information online. Any advisers should be registered with the Financial Services Authority (FSA).
- Ask for a statement showing how your pension will be paid at retirement, and question who will look after your money until then.
- Speak to an adviser that is not associated with the proposal you’ve received, for unbiased advice.
- Never be rushed into agreeing to a pension transfer.
The initiative is supported by The Pensions Regulator, HM Revenue & Customs, the Financial Services Authority (FSA), Serious Fraud Office and SOCA (the Serious Organised Crime Agency).
Full information can be found here: http://www.thepensionsregulator.gov.uk/pension-liberation-fraud.aspx.
If you think you have been a victim of this or another form of fraud, contact Action Fraud on 0300 123 2040, or at Action Fraud.
Action Fraud is the UK’s national fraud and internet crime reporting centre. It provides a central point of contact for information about fraud and financially motivated internet crime. If you’ve been scammed, ripped off or conned, there is something you can do about it – get in touch with Action Fraud.