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Pension ‘predators’ websites suspended


Regulators have suspended the websites of 18 ‘predators’ who run schemes aimed at getting people to try and gain early access to their pension.
A person can only access their pension without having to pay heavy tax fees once they turn 55 years old, with the exception that a person is in serious ill-health.

However, there are a growing number of schemes that aim to work around the rules by either by offering a loan, which is then secured against the person’s pension fund, or by transferring it to unregulated overseas investments, which can be very risky.

These schemes operate in a grey area of the law, and up to 70% of funds released from a pension before the age of 55 can be deemed to be payable to H M Revenue and Customs (HMRC) in the form of taxes.

Additionally, the scheme operators often charge high fees in order to release pension funds, which can sometimes be as high as 20%, therefore leaving people with a reduced lump sum which is not significant enough to fund their retirement.

Unethical, exploitative, poor value offers

Pensions minister, Steve Webb criticised the schemes in a statement as he said: “Although quick-fix pension release schemes may seem tempting, particularly when times are tough, people should make sure they understand all the implications before they sign on the dotted line.”

Webb continued to say that the government is working alongside the pension industry to “stamp out these unethical, exploitative, poor value offers”. He also said that anyone thinking about using one of the schemes should seek financial advice, but if in doubt they should “steer clear” from the schemes all together.

These ‘pension liberation’ schemes have been growing in numbers recently, and the value of the market is now believed to be over £495 million.

However, following a campaign that was launched in February 2013 by the Pensions Regulator, the clamp down appears to be working.

So far, the courts have received an application for assets to be frozen in 20 schemes, the National Crime Agency have suspended 18 pension liberation schemes, and the City of London Police made seven arrests in May.

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