Pension liberation fraudThe scam, known as pension liberation fraud, is when victims receive uninvited contact by email, telephone or text message, duping them into transferring their funds to rogue pension arrangements, often overseas for a commission fee.Tax penaltiesTax charges of over half the value of your pension could fall on you for taking an ‘unauthorised payment ‘from your pension fund in this way. In addition, fees deducted from your pension for the transfer are unlikely to be recovered. Such fees tend to be very high and could be 20% or more of your pension savings in some cases. Most of the time, people targeted by pension fraudsters or scammers are not informed of the potential tax consequences involved payable to HM Revenue and Customs (HMRC).Accessing pensions before the age of 55Accessing pension savings before minimum pension age is only possible in rare cases, like terminal illness. Pension liberation should not be confused with 'pension unlocking'. This is a legitimate although potentially risky means for people aged 50 or more to take early retirement and release their pension benefits from an occupational or personal pension, as long as the legal requirements are met.The Pension Regulator’s five steps to avoid becoming a victim1. Never give out financial or personal information to a cold caller2. Check the credentials of the company and any advisers – who should be registered with the Financial Services Authority3. Ask for a statement showing how your pension will be paid at retirement, and question who will look after your money until then4. Speak to an adviser that is not associated with the deal you’ve been offered, for unbiased advice5. Never be rushed into agreeing to a pension transfer.Read more on the Pensions Regulator website.If you are a victim of fraud you can call Action Fraud on 0300 123 2040 or use their online fraud reporting tool.
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