Warning over pension pot cash scams

Work and Pensions Minister Steve Webb urged people to beware of offers to transfer their pension that sound “too good to be true”.

Pension liberation schemes, whereby workers are offered early access to their savings by handing over their pensions in exchange for instant cash, often fail to point out that a possible 55 per cent fee could end up with the taxman.

Mr Webb said: “Pension liberation fraud is a crime.

“That is why, as part of our plans to build a fairer society, we are working across government and industry to stamp it out and to raise awareness of the dangers of handing over your pension pot.

“By signing up to one of these schemes you will destroy your future retirement savings.

“The promise of easy money when times are tough is all too tempting, and there are far too many unscrupulous people who will prey upon this. These people want your pension pot and if you are offered a deal to unlock your pension, don’t touch it.”

On Thursday a cross-Government taskforce will attend a summit in London, hosted by the Pensions Regulator, to discuss with pension providers and industry groups how to clamp down on schemes that put people’s retirement savings at risk.