A pensions expert is warning of a potential scam which could leave savers out of pocket.
Emily Jacobs, a Director at Richard Jacobs Pension and Trustee Services, of Newcastle, Staffordshire, says she has seen evidence of people being approached with a pension liberation offer.
People are being offered the chance to release pension cash immediately as a loan or lump sum.
Emily said: “While some people may be tempted by this offer, we would urge extreme caution.
“You cannot have your tax free lump sum released until you are 55 years old, but there is evidence that people are being approached at an earlier age.
“What you are not told is that accessing your pension before the age of 55 can lead to significant tax penalties and charges.
“More than half the money you are promised may be taken in fees and there will be a significant loss in terms of potential pension earnings in the longer term.”
The Government has launched an investigation into pension liberation schemes.
Minister for Pensions, Steve Webb MP, said: “Money in a pension is there for retirement and should not be released before at least the age of 55. The Government is investigating a number of schemes where firms appear to be preying on people when times are tight, and I am working closely with The Pensions Regulator to ensure rules are not being broken.”
HMRC reiterated the warning stating that the tax relief available on pension contributions was designed to encourage people to save for their retirement and that action would be taken against anyone who attempts to bend the rules.
Anyone with information about pension liberation schemes should contact Acton Fraud, the UK’s national fraud reporting centre by telephoning 0300 123 2040.
For further information contact Emily Jacobs on 01782 557800.
Notes to Editors: Richard Jacobs Pension & Trustee Services Ltd was established in 1992 and operates from offices in Water Street, Newcastle-under-Lyme.
The company is run by Richard Jacobs, who has experience in financial services industry dating back to 1971, and Emily Jacobs a Director in the company and daughter of the founder.