Don’t let ‘pension liberation’ ruin your retirement

Aside from our houses our pensions are probably our most valuable assets. indeed for hundreds of thousands of us our pensions will be worth more than the houses we live in. Shame then that a number of unscrupulous ‘pension liberation’ firms are on the hunt for gullible investors so that they can access your pension funds. They’ll tell you that they can help you access your cash earlier than a normal pension, and in order to do that you will need to transfer your pension elsewhere. It might even be to an overseas trust, or to a company that you have never heard of. Please don’t be tempted. The old adage that if an offer sounds too good to be true then it probably is is absolutely true in this case.

Pension legislation in the UK is very strict because it is important that the fund you have worked hard to build up over many years, and which will be needed to provide an income over many more years, is protected. You may well be able to do at least some of what there companies suggest you can do, but the cost could be enormous, with horrendous tax penalties deducted from the value of your fund for a breach of HMRC rules. A breach that you will know nothing about because they won’t tell you that part of it.

It might seem very tempting to take up an offer to access some of your pension fund before 55 but resist the temptation. The penalty for succumbing could be very high. You likely to face still financial penalties and many of the firms offering these services are either unregulated or regulated offshore, so any attempt to claw back your losses are likely to be fruitless.

There are no loopholes that allow you to access your pension before 55 – there are a very small number of people who can do this, but they will generally know in advance who they are – so don’t fall for talk of big pots of money at an early age. It won’t happen.

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