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Pension liberation fraud

The Pensions Regulator has launched a campaign warning people of a scam on the rise where fraudsters use misleading information to entice savers to release their pension early.

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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 penalties

Tax 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 55

Accessing 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 victim

1. Never give out financial or personal information to a cold caller

2. Check the credentials of the company and any advisers – who should be registered with the Financial Services Authority

3. Ask for a statement showing how your pension will be paid at retirement, and question who will look after your money until then

4. Speak to an adviser that is not associated with the deal you’ve been offered, for unbiased advice

5. Never be rushed into agreeing to a pension transfer.


The Pension Regulator has produced some resources for you to download to help prevent you becoming a victim.

Read more on the Pensions Regulator website.

Please note: Action Fraud is not responsible for the content on external websites. If you have been a victim of this type of fraud, report it to Action Fraud by calling us on 0300 123 2040 or by using our online reporting tool.

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